14 October 2002 Disk drive maker Seagate Technology has filed to go public, only two and a half years after it was taken private when a consortium led by venture capital group Silver Lake Partners bought it for just under $1.7 billion (€1.72bn).

The company expects to raise about $1 billion (€1.01bn) from the IPO, which will be led by investment banks Morgan Stanley and Salomon Smith Barney.

The filing took financial analysts by surprise in view of the continuing recession in the computer industry and the depressed state of stock markets worldwide. However, Seagate is currently profitable and sales have held steady in the last two years.

According to analysts IDC, Seagate is the world’s largest manufacturer of disc drives in terms of unit shipments, with a 28.3% market share for the six months to the end of June 2002, up from a 23.5% market share achieved in 2001.

Revenues in the quarter to the end of September totalled $1.58 billion, up by 22% compared to the $1.29 billion posted a year earlier. Net income in its latest quarter weighed in at $110 million (€111.3m).

For the year to the end of June 2002, Seagate achieved revenues of $6.09 billion (€6.16bn) – the same as in fiscal 2000 and down marginally on the revenues chalked up in 1998 and 1999. However, revenues in the last two years have not fallen, despite the downturn in sales in the PC and server markets.

The company attributed its performance in an otherwise tough trading period to “improved execution and time-to-market”, enabling it to get next generation products to market before competitors.

However, it has also been helped by consolidation in the industry. Rivals Quantum and Maxtor merged their hard disk drive manufacturing operations in late 2000. Fujitsu announced its exit from the desk-top PC hard disk drive market in August 2001 and in April 2002, Japanese conglomerate Hitachi absorbed most of IBM’s disk drive subsidiary in a $2 billion (€2.03bn) deal.