Seagate to buy HAMR hard drive maker for $119 million

Seagate has announced plans to acquire Intevac, a maker of hard disk drive (HDD) manufacturing equipment. Intevac is known for its 200 Lean system, which uses a sputtering process to deposit thin films onto hard disk drive platters, forming coatings for HAMR drives. The deal is valued at $119 million.

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The parties have entered into a definitive agreement to sell Intevac for $4.00 per share in cash. In addition, prior to closing, the company will pay shareholders a special dividend of $0.052 per share, increasing the total transaction value to $4.102 per share, representing a 45% premium to Intevac’s closing price of $2.83 per share on December 11, 2024, when the company announced it was pursuing strategic options.

Seagate is acquiring Intevac because it is interested in increasing its manufacturing capacity for Heat-Assisted Magnetic Recording (HAMR) technology as production of such drives ramps up. Wedbush analyst Matt Bryson noted that the deal could “reduce [Seagate’s] capital expenditures given the need to upgrade hardware to support HAMR.” It also shows Seagate’s confidence in its technology.

Image source: Intevac

In terms of competitive implications, Seagate’s acquisition of Intevac could make it more difficult for Toshiba and Western Digital to adopt HAMR technology because it would reduce the availability of equipment. However, Bryson suggested that those companies would be less likely to buy equipment from Seagate, a competitor.

However, Western Digital and Resonac could object to the deal on the grounds of lessening competition, which could delay the completion of the deal or even cause it to be canceled. However, Seagate’s legal team has presumably already considered and ruled out this possibility.

The transaction is expected to close in late March or early April 2025, subject to the satisfaction of all necessary conditions.