Seagate Acquires Intevac for $119 Million - Expanding HDD Capabilities

Seagate to Acquire Intevac in $119 Million Deal

Seagate, a leading company in data storage solutions, has revealed its plans to acquire Intevac, a producer of equipment utilized in hard drive manufacturing. The acquisition will be completed through an all-cash transaction valued at $119 million.

Details of the Acquisition

According to a statement released on Thursday, Seagate will offer $4 per share to Intevac shareholders through a tender offer. Initially, the company intends to secure ownership of more than 50% of Intevac’s outstanding shares.

Following this initial purchase, Seagate will proceed with a subsequent merger to acquire all remaining shares of the company. The transaction has received unanimous approval from Intevac’s board of directors and its major shareholders.

The completion of this acquisition is anticipated to occur in late March or early April, contingent upon the fulfillment of standard closing requirements.

About Intevac

Founded in 1991 as a spin-off from Varian Associates, Intevac is headquartered in Santa Clara, California. The company specializes in the manufacturing of thin film deposition systems.

Intevac became a publicly traded company in 1995 and has since expanded its operations to include key territories such as China, Malaysia, and Singapore.

The company’s products are designed to support the production of hard drive disk media and facilitate upgrades to existing hard drive systems.

HAMR Technology and Seagate’s Strategy

Intevac prominently features heat-assisted magnetic recording (HAMR) as a key technology. HAMR enhances the storage density and writeability of hard drives by utilizing thermal energy.

This acquisition aligns directly with Seagate’s core hard drive business. In December, Seagate reintroduced HAMR technology with its first HAMR-based hard drive after a 20-year pause.

The company is preparing to ship HAMR-based drives to several customers, including a prominent cloud service provider, throughout the current year.

Industry Context and Competition

Competitors like Western Digital and Toshiba are also actively developing HAMR-based drives. This surge in development is driven by the increasing global demand for data storage solutions.

HAMR-based drives offer a cost advantage compared to solid-state technologies, making them particularly appealing to public cloud vendors.

Intevac’s Financial Performance

As of Thursday, Intevac’s market capitalization stood at approximately $91.17 million. In the third quarter of fiscal year 2024, the company reported revenue of $28.5 million, representing a 59% increase year-over-year.

Despite the revenue growth, Intevac experienced a net loss of $2.17 million during the same period.

Late last year, Intevac announced it was evaluating “strategic options,” including a potential restructuring aimed at improving profitability. An exit from the public market was considered as one such option.

Seagate’s Acquisition History

This acquisition marks Seagate’s first major purchase since the acquisition of Kioxia, a supplier of flash memory and solid-state drives, in 2017.

Throughout its 46-year history, Seagate has completed 11 acquisitions, totaling approximately $18 billion, according to data from Tracxn.