Seagate 2013 Annual Report Download - page 30

Table of Contents
candidates. Accordingly, we may not be able to identify suitable strategic alliances, acquisition, joint venture, or investment candidates. Even if
we can identify them, we cannot assure you that we will be able to partner with, acquire or invest in suitable candidates, or integrate acquired
technologies or operations successfully into our existing technologies and operations. Moreover, our ability to finance potential strategic
alliances, acquisitions, joint ventures or investments will be limited by our high degree of leverage, the covenants contained in the instruments
that govern our outstanding indebtedness, and any agreements governing any other debt we may incur.
If we are successful in forming strategic alliances or acquiring, forming joint ventures or making investments in other companies, any of
these transactions may have an adverse effect on our results of operations, particularly while the operations of an acquired business are being
integrated. It is also likely that integration of acquired companies would lead to the loss of key employees from those companies or the loss of
customers of those companies. In addition, the integration of any acquired companies would require substantial attention from our senior
management, which may limit the amount of time available to be devoted to our day-to-day operations or to the execution of our strategy.
Growth by strategic alliance, acquisition, joint venture or investment involves an even higher degree of risk to the extent we combine new
product offerings and enter new markets in which we have limited experience, and no assurance can be given that acquisitions of entities with
new or alternative business models will be successfully integrated or achieve their stated objectives.
Furthermore, the expansion of our business involves the risk that we might not manage our growth effectively, that we would incur
additional debt to finance these acquisitions or investments, that we may have impairment of goodwill or acquired intangible assets associated
with these acquisitions and that we would incur substantial charges relating to the write-off of in-process research and development, similar to
that which we incurred in connection with several of our prior acquisitions. Each of these items could have a material adverse effect on our
financial condition and results of operations.
In addition, we could issue additional ordinary shares in connection with future strategic alliances, acquisitions, joint ventures or
investments. Issuing shares in connection with such transactions would have the effect of diluting your ownership percentage of the ordinary
shares and could cause the price of our ordinary shares to decline.
We may not be successful in our efforts to grow our cloud systems and solutions business.
We have made and are continuing to make investments to expand and develop our cloud systems and solutions business, including our
recent acquisition of Xyratex Ltd ("Xyratex"), a data storage technology company. Our cloud systems and solutions business is subject to the
following risks:
• the cloud systems and solutions market may develop more slowly than we expect;
• we may not be able to offer compelling solutions to enterprises and consumers;
• our cloud systems and solutions business generally has a long and unpredictable sales cycle, and growth in this business is likely
to depend on relatively large customer orders, which may increase the variability of our results of operations and the difficulty of
matching revenues with expenses.
Our results of operations and share price may be adversely affected if we are not successful in our efforts to grow our cloud computing
business as anticipated. In addition, our growth in this sector may bring us into closer competition with some of our customers or potential
customers, which may decrease their willingness to do business with us.
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