Maxtor Corp. Registers for $575 Million Initial Public Offering

Strategic Insights -

In a bid to alleviate its parent company's financial struggles, Maxtor Corp. has filed for a massive initial public offering (IPO) worth $575 million. The California-based disk drive manufacturer, which employs over 1,000 people at its research and development center in Longmont, has seen its sales skyrocket to nearly $550 million in the March quarter, surpassing 13% market share. However, despite a brief stint of profitability, the company still maintains a substantial accumulated deficit of over $780 million and long-term debt of $220 million.

Key Takeaways:

  • Maxtor Corp. has registered for a $575 million initial public offering to raise cash for its parent company, Hyundai Electronics America.
  • Hyundai is struggling with currency and trade woes that have beset South Korea, prompting the sale of its Symbios semiconductor division to Adaptec Inc. for $775 million cash.
  • Maxtor sells hard disk drives to major PC makers such as Compaq, IBM, and Dell, and has achieved significant sales growth, rising to nearly $550 million in the March quarter.
  • The company has an accumulated deficit of over $780 million and long-term debt of $220 million, emphasizing the need for the IPO.
  • Maxtor broke a 19-quarter string of losses with a $23 million profit in the current year but quickly returned to the red.
  • The company's research and development center and pilot manufacturing facility in Longmont, Colorado, employ over 1,000 people.
  • Hyundai will maintain controlling interest in Maxtor following the IPO.

Statistics:

  • $575 million: The proposed amount of Maxtor's initial public offering.
  • $255.5 million: The amount of debt that Maxtor will use the IPO proceeds to repay.
  • $780 million: The accumulated deficit of Maxtor Corp.
  • $220 million: Maxtor's long-term debt.
  • $550 million: The sales figure for Maxtor in the March quarter.
  • 13%: Maxtor's market share of hard disk drives.
  • 1,000+: The number of people employed by Maxtor at its research and development center in Longmont.
  • 19 quarters: The string of losses that Maxtor broke with a $23 million profit.
  • $23 million: The profit achieved by Maxtor in the current year.
  • $775 million: The sale price of Hyundai's Symbios semiconductor division to Adaptec Inc.

Sources:

  • Lisa Greim, Rocky Mountain News Staff Writer.
  • Registration statement filed with the Securities and Exchange Commission.
  • Annual reports and financial statements of Maxtor Corp. and Hyundai Electronics America.