Obfuscatory Acquisitions

The doom-and-bust hard-drive industry is apparently going through one of its periodic M&A paroxysms, with news this morning that drive maker Seagate is buying competitor Maxtor in a $1.9-billion acquisition. Leaving aside the merits of the deal, or your view of the lack thereof (and there are ample arguments on both side), I’m fond of the following snippet from the press release announcing the deal:

The combined company is expected to generate significant synergies, and the transaction is expected to be at least 10-20% accretive to Seagate on a cash EPS basis after the first full year of combined operations. As with other past combinations of disc drive manufacturers, revenue attrition is anticipated to result from this combination. Synergy estimates take into account anticipated revenue attrition. [Emphasis added]

Revenue attrition … you have to like that bit of obfuscatory acquisition lingo. Oh, you mean that sales of the combined company will be less than the two separate companies? I see. That coinage is right up there with “rapid unscheduled disassembly” (when a model rocket blows up unexpectedly).


  1. That’s right up there with “in-process R&D” which basically means that the Goodwill number was already so huge we had to account for this valuation somewhere else.