Seagate to acquire controlling interest in LaCie

Seagate Technology plc (NASDAQ: STX) and LaCie S.A. (Euronext: LAC) today announced an exclusive agreement with the intent for Seagate to acquire a controlling interest in LaCie. Seagate has offered to purchase from Philippe Spruch, LaCie’s chairman and CEO, and his affiliate, all of their shares, representing 64.5% of the outstanding shares of LaCie. Following receipt of governmental approvals1 and the close of this transaction, Seagate would commence an all-cash simplified tender offer (followed as the case may be by a squeeze-out procedure) to acquire the remaining outstanding shares in accordance with the General Regulation of the French Autorité des Marchés Financiers (AMF).

Seagate has offered Mr. Spruch and his affiliate €4.05 per share in cash, minus a potential adjustment depending on the cash and debt position of LaCie at closing. This price may be increased by a possible price supplement of 3% in the event that the threshold of 95% of the shares and voting rights of LaCie would be reached by Seagate within 6 months following closing, resulting in a maximum potential price per LaCie share of €4.17. Without the price supplement, the offer currently values LaCie at an approximate €146 million, or $186 million total equity value, including acquired net cash of approximately €49 million, or $65 million, as of March 31, 2012. The €4.05 per share price represents a premium of 29% to LaCie’s average closing stock price over the 30 trading days ended May 22, 2012.

Ricol Lasteyrie & Associés was appointed today as independent expert by the board of directors of LaCie, to deliver a fairness opinion on the price that would be offered in the context of the tender offer, including in the perspective of a potential squeeze-out procedure.

The transaction would combine two highly complementary product and technology portfolios, adding LaCie’s line of premium branded consumer storage solutions, network-attached storage solutions and software offerings to Seagate’s array of mainstream consumer storage products. The combination would accelerate Seagate’s growth strategy in the expanding consumer storage market, particularly in Europe and Japan, and add strong engineering and software development capabilities, as well as relationships with several key retailers.

The transaction is expected to be neutral to Seagate’s fiscal 2013 earnings per share.

Following the close of the sale of his shares to Seagate, Mr. Spruch would join Seagate and lead the company’s consumer storage products organization. Reporting to him would be Patrick Connolly, who currently serves as vice president and general manager of Seagate’s retail group, as well as Pierre van der Elst, who currently serves as deputy general manager of LaCie. The financial terms of the new position of Mr Spruch are not determined as of today and would therefore be described subsequently, including in the tender offer documentation.

“Seagate has a strong commitment to the growing consumer storage market and bringing the most dynamic products to market. LaCie has built an exceptional consumer brand by delivering exciting and innovative high-end products for many years. This transaction would bring a highly complementary set of capabilities to Seagate, significantly expand our consumer product offerings, add a premium-branded direct-attached storage line, strengthen our network-attached storage business line and enhance our capabilities in software development,” said Steve Luczo, Seagate chairman, president and CEO, in the press release. “We are also excited that Philippe, who is a true visionary and leader in the consumer storage business, would join Seagate to run our consumer storage products organization.”

“With the proliferation of devices and content being shared and stored today, consumer demand for high-quality branded storage solutions continues to grow,” said Philippe Spruch, LaCie’s chairman and CEO, in the press release. “We are excited about the potential for this combination to benefit customers and employees by creating significant scale and opening up new markets. We look forward to making the resources of a much larger company available to our customers around the world.”

LaCie will initiate the information and consultation process required by its employee representative council in relation to the contemplated transaction, in accordance with French law. Upon completion of this process, Seagate and Mr. Spruch would execute a definitive share purchase agreement and finalize the purchase of the controlling interest held by Mr. Spruch and his affiliate. This share purchase transaction is expected to close in the third calendar quarter of 2012 pending completion of the relevant governmental reviews. Seagate would then commence a tender offer for the remaining outstanding shares of LaCie (followed as the case may be by a squeeze-out procedure), subject to a clearance decision from the AMF. The tender offer is expected to be completed in the third calendar quarter of 2012.

The transaction is subject to regulatory approval in the United States (antitrust filing), France (approval of foreign investments by the Ministry of Finance) and other jurisdictions (antitrust filing in Germany) and to other customary closing conditions.

Morgan Stanley & Co. LLC served as financial advisor and Allen & Overy LLP served as legal advisor to Seagate in connection with the transaction. De Pardieu Brocas Maffei A.A.R.P.I. served as legal advisor to LaCie.

1Antitrust filings in the United States and in Germany and approval of foreign investments by the French Ministry of Finance.

Source: Seagate Technology plc

14 Comments

  1. @ Gary – my experiences with LaCie have been entirely positive, including warranty support.

    Every company, including Apple, has the occasional bad service story.

  2. Good. Kill the brand off and QUICK. LaCie’s products are second rate, and their customer service less so. I always steer clients and friends away from the LaCie brand.

  3. I’ve invested in 5 LaCie drives. Their power bricks are extremely flaky. I spent a lot of money buying additional power supplies. Not a good experience.

    1. Their controller boards are also flakey. I have had at least a dozen failures in the last 9 years. Pulling the drives (western digital) out of the LaCie enclosure and testing them, the drives have always been good.

      I decided that it was better to get the universal drive adapters and have a bin full of high capacity drives that I use with them. It is cheaper, more flexible an gets it done. They just aren’t “pretty” looking.

      1. For Maxtor, that was only the right thing to do, if you believe the horror stories of the drives.
        LaCie, in contrast, doesn’t manufacture drives, it selects them, and rather good ones at that. It boxes them.
        Only problem: the power supplies, something they could fix easily.

    1. We buy hard drives at a rate of 100 a month. We buy mainly Seagate Hitachi and WD. We pile the damaged drives and analyze them every 3 months. 80% of the junk is WD, those are the worst. Seagate and Hitachi do pretty well. Also for the record we stopped buying Samsung because they didn’t last more than a few months.

  4. Every LaCie external drive I’ve ever owned failed prematurely. Two were defective power adapters, 2 were controller boards. Pulled them apart and reused the drives themselves, which still worked fine. Got lots of complaints and sad people with dead LaCie drives when I worked in an Apple store. I own numerous Seagate drives and have had good success with them.

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