Seagate Technology Inc is take back 100% ownership of its Seagate Software Inc division, the company said on Friday. The move will mean it will post a charge of $216m, probably in its second quarter, ending in December. It will also make it easier for Seagate to take the software division to its IPO, something it has been indicating it wishes to do for the some time.
Seagate Software’s assets includes both the assets of the Information Management Group, and also the shares of Veritas Software Corp received from Seagate’s sale of the Network and Storage Management Group to Veritas in 1998. Those minority stockholders and option holders will receive payment in the form of Seagate Technology common stock, in return for their proportionate interest in the entire value of Seagate Software Inc – including IMG assets and Veritas common stock.
Because the value of the Veritas stock was far greater than that of the IMG business, Seagate says the separation of the two will provide a clearer incentive for its employees to focus on the future development of the IMG business. Current and future employees will receive stock options directly related to the future performance of the IMG business. Proceeds from the sale of Veritas stock will be used for funding its core business.
Seagate filed the relevant papers to the SEC over a year ago, and only needs to revise its IPO prospectus by taking out any NSMG revenue and projections. Taking the division public would help it realize its true market value, says Seagate. Seagate Software’s business intelligence revenue for 1998 was approximately $126m, compared with $199m for the NSMG division. á
