Seagate private equity interest grows,shares surge

Fri Oct 15, 2010 6:40pm EDT

* Seagate has market value of around $7 bln

* Company has long-term debt of $2.5 bln

* Private equity interest increasing -- sources

* Shares close up 22 pct

NEW YORK, Oct 15 (Reuters) - Interest in a potential buyout of hard drive maker Seagate Technology (STX.O) is growing, with private equity firms Kohlberg Kravis Roberts & Co (KKR.N) and Bain Capital potentially interested in the company, two sources familiar with the situation said.

Hard drive maker Seagate said on Thursday it is in talks to be taken private by an undisclosed buyer and two sources familiar with the matter said those talks involve buyout firm TPG Capital LP [TPG.UL]. For more details [ID:nN14153918]

TPG and rival private equity firm Silver Lake Partners [SILAK.UL] previously held early-stage discussions about buying the hard-drive manufacturer, a source familiar with the matter told Reuters in September.

The talks were early-stage and faltered that source said at the time.

Silver Lake, however, is not involved anymore, a source familiar with the situation said on Thursday. It was unclear whether the interested private equity firms have teamed up.

Seagate Technology has a market capitalization of about $7 billion and has long-term debt of around $2.5 billion. The company's income from operations for the three months to July 2 was $380 million.

The company's shares surged 22 percent on Friday to $15.51.

The sources declined to be named because the talks are private.

The private equity firms declined comment. (Reporting by Megan Davies; editing by Andre Grenon)

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