The disk drive business isn’t exciting. But it does generate nice cash flows.
Over the weekend, KKR announced that it is buying Unisteel, which is a disk drive component developer in Singapore. There were other bidders at the table, such as the Carlyle Group, TPG, and Bain Capital.
The price tag: $578 million.
Unisteel is listed on the Singapore exchange. Because of low trading volume, there are several bargains to pick from, which should be attractive to private equity players.
From a strategic standpoint, the Unisteel deal is another sign of the consolidation in the global disk drive market, in which scale is incredibly important.
Interestingly enough, KKR purchased another disk drive operator, MMI Holdings, about a year ago. So, by combining MMI and Unisteel, there should be some juicy cost savings.
Moreover, it looks like KKR will continue to focus on Asia. After all, the firm recently raised a $4 billion fund that is focused on the region.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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