Skip to content
Subscriber Only

How Seagate Got Its Groove Back

Going private freed the disk-drive maker from Wall Street's unrelenting demands. Now retooled, profitable, and boasting a 56% market share, it may be ready to go public again

In early 2000, something seemed out of whack to Stephen J. Luczo, CEO of leading computer disk-drive maker Seagate Technology Inc. Sure, the company was losing money, but its $15 billion market value didn't make sense: It was actually $3 billion less than Seagate's 33% share of hot software maker Veritas Software Corp. (VRTS ), whose sales were just 10% of Seagate's $6 billion. So Luczo tapped two investment firms to help engineer an elaborate deal with Veritas that cashed out that stake for shareholders, sold off ancillary units, and took the stripped-down Seagate private.

The result: Seagate executives could now ignore Wall Street's relentless demands for quarterly earnings and turn their full focus to stepping up a manufacturing revamp it began two years before.