Seagate Inks Deal to Acquire Intevac in $119 Million All-Cash Deal

Seagate Technology Holdings plc STX has signed a definitive agreement to acquire Intevac, a supplier of thin-film processing systems, for $4.00 per share in an all-cash transaction. As part of the acquisition, Seagate will launch a cash tender offer to purchase all outstanding shares of Intevac at the agreed price, contingent on a minimum tender threshold exceeding 50% of shares and standard regulatory approvals.Following the completion, Seagate will execute a second-step merger to acquire remaining shares at the same cash price of $4. Intevac’s board of directors has unanimously approved the acquisition and recommends stockholders tender their shares.Seagate Technology Holdings PLC Price and Consensus Seagate Technology Holdings PLC price-consensus-chart | Seagate Technology Holdings PLC QuotePer the deal, Intevac will issue a one-time special dividend of 5.20 cents per share around the closing date, in addition to its regular quarterly dividend of 5 cents, payable March 13, 2025, to stockholders of record as of Feb. 28, 2025. Including both dividends, Intevac stockholders will receive a total of $4.102 per share, reflecting a 45% premium to the Dec. 11, 2024, closing price of $2.83 and a 21% premium to the Feb. 12, 2025, price of $3.38. The transaction's total value stands at around $119 million.Expected to close by late March or early April 2025, the acquisition is anticipated to be accretive to Seagate’s non-GAAP earnings per share over the long term with minimal short-term impact. Due to the transaction, Intevac has canceled its previously scheduled earnings call on Feb. 25, 2025.STX’s Growth DriversSeagate is leading provider of data storage technology and infrastructure solutions. The company’s primary product offering is hard disk drives, which are commonly referred to as disk drives, hard drives or HDDs. HDDs are used as the primary medium for storing digitally encoded data on rapidly rotating disks with magnetic surfaces. Seagate also develops other electronic data storage products such as SSD (solid state drive) and storage subsystems.Seagate is witnessing strong mass capacity demand, especially for nearline products. In second-quarter fiscal 2025, mass capacity revenues surged 79% year over year and 9% sequentially, owing to strong cloud demand. Its mass capacity exabyte shipments now represent more than 93% of HDD exabyte shipments. Nearline revenues nearly doubled in the last reported quarter from the prior year, reflecting 60% growth for 2024. This surge was fueled by robust demand from both cloud service providers (CSPs) and Enterprise/OEM clients. Furthermore, these capital expenditures investments are expected to keep growing steadily throughout the calendar year 2025.Also, CSPs are focusing more on the development and deployment of artificial intelligence (AI) applications while building cloud infrastructure. Seagate believes HDDs will play a key role in enabling these stages of the AI adoption curve and expects HDD demand to pick up pace going ahead. Higher adoption of AI analytics within the VIA markets is another lucrative revenue opportunity for STX amid the increasing development of smart cities and smart factories.Seagate expects HAMR to aid in exploiting megatrends like AI and machine learning, which will drive long-term demand for cost-effective mass-capacity storage solutions. The company has significantly increased production of its 24-28 terabyte PMR drives, which is now its top-selling product line in terms of both revenues and exabyte shipments. It has also achieved a significant milestone by sampling products with capacities as high as 36 terabytes. The company anticipates delivering capacity increases through further areal density gains for its Mozaic 4+ platform.Seagate’s Zacks Rank & Stock Price PerformanceSTX currently carries a Zacks Rank #3 (Hold). Shares of the company have soared 10.9% in the past year against the industry’s decline of 1.4%.Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks from the broader technology space are International Business Machines Corporation IBM, NetApp, Inc. NTAP and Hewlett Packard Enterprise Company HPE. IBM, NTAP & HPE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for International Business Machines 2025 earnings per share is pegged at $10.77, unchanged in the past seven days. IBM earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6.14%. The company’s long-term earnings growth rate is 4.2%. Its shares have jumped 33.6% in the past six months.NTAP’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6.53%. In the last reported quarter, NetApp delivered an earnings surprise of 4.47%. The company’s long-term earnings growth rate is 7.2%. Its shares have surged 34.9% in the past year.HPE’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.84%. In the last reported quarter, Hewlett Packard delivered an earnings surprise of 5.45%. The company’s long-term earnings growth rate is 5.8%. Its shares have surged 39.4% in the past year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM): Free Stock Analysis Report NetApp, Inc. (NTAP): Free Stock Analysis Report Seagate Technology Holdings PLC (STX): Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks