Terms of Seagate/MetaLINCS Transaction

Last week, storage manufacturer Seagate announced it will purchase e-discovery vendor MetaLINCS.

The terms of the deal were not disclosed. Nor are many financial details on MetaLINCS. Here are our thoughts:

  • MetaLINCS has 50 employees.
  • It is not yet profitable.
  • We estimate annual revenues at $7 million to $10 million.
  • The firm has established itself as having good technology in the early stages of an important new market, so we expect a purchase price between $75 million and $300 million.
  • All things being equal, we guestimate a price of around $150 million.
  • $50 million to $75 million would be a very good deal for Seagate; $250 million+ a very good one for MetaLINCS.

    Any further information, off the record, from friends in the industry would be welcome! Please email david.ferris@ferris.com or post a comment to this item on our weblog.

    ... David Ferris

One Comment

  1. Posted December 11, 2007 at 12:56 PM | Permalink

    Excellent Article/Post on Seagate/MetaLINCS deal by Clearwell CEO at:
    http://clearwellsystems.blogspot.com/2007/12/seagate-acquires-metalincs-for-80.html

  2. Posted December 11, 2007 at 3:28 PM | Permalink

    Hi Rob,
    Thanks for kind words about my post.

    David,
    In announcing the acquisition, Seagate stated that MetaLINCS has “less than 25 customers”. Given that the company has been in business since 2003, and not all of those customers signed up this year, there is no way its revenue would be as high as $7-10M. I think a range of $4-7M is more realistic.

    With regard to the price, my sources are rock-solid: Seagate paid $80M. More details at: http://clearwellsystems.blogspot.com/2007/12/seagate-acquires-metalincs-for-80.html

    All the best,
    Aaref

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