Seagate Technology has officially announced its intent to acquire Intevac, a specialist in hard drive manufacturing equipment, in an all-cash transaction valued at $119 million. The deal, aimed at bolstering Seagate’s storage hardware capabilities, was confirmed this Thursday.
Strategic Acquisition Details
Under the terms of the agreement, Seagate will launch a tender offer to purchase shares of the publicly traded company at $4 per share. The acquisition process involves an initial purchase of at least 50% of outstanding shares, followed by a “second step” merger to finalize the acquisition of the remaining equity.
The transaction has already secured unanimous approval from both the board of directors and the primary shareholders of Intevac. Pending customary closing conditions, the companies anticipate the deal will close between late March and early April.
Focus on HAMR Technology
Santa Clara-based Intevac, established in 1991, provides critical thin-film deposition systems used in hard disk drive media production. The company’s expertise is particularly vital for Heat-Assisted Magnetic Recording (HAMR), a technology that utilizes heat energy to significantly enhance storage density and “writeability” in hard drives.
This acquisition aligns perfectly with Seagate’s current product roadmap. In December, Seagate unveiled its first HAMR-based hard drive after a two-decade development cycle. The company is already preparing to supply these high-capacity drives to major cloud providers throughout the year.
Market Context and Financials
The storage industry is currently witnessing a surge in demand, prompting competitors like Western Digital and Toshiba to accelerate their own HAMR development. Compared to solid-state technologies, HAMR-based drives offer a distinct cost advantage, making them an essential asset for large-scale public cloud infrastructure.
Intevac, which holds a market cap of approximately $91.17 million, reported $28.5 million in revenue for Q3 2024—a 59% year-over-year increase—despite a net loss of $2.17 million. Late last year, the firm began exploring “strategic options” to improve profitability, ultimately leading to this exit from the public markets.
Seagate’s M&A History
This move marks Seagate’s first major acquisition since its 2017 deal for Kioxia, a prominent supplier of flash memory and solid-state drives. According to data from Tracxn, Seagate has completed 11 acquisitions throughout its 46-year history, with a total investment value reaching roughly $18 billion.