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Hewlett Packard Enterprise to acquire SGI for $275Mn to strengthen its high-performance computing infra

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Hewlett Packard Enterprise, a split part of HP in 2015, has today announced that it has agreed to acquire SGI(formerly known as Silicon Graphics Inc.), a company that provides high-performance computing solutions for data analytics, and data management.

The transaction has been valued at approximately $275 million, and HPE has agreed to pay $7.75 per share in a mix of cash and debt. The deal is subject to regulatory approval and expected to close in the first quarter of HPE’s fiscal year 2017.

Both entities believe that by combining complementary product portfolios and go-to-market approaches, they will be able to strengthen their position in the $11 billion HPC segment which is growing at an estimated 6-8% CAGR. It will also amplify the financial performance of the combined entity, which HPE expects to have neutral effect to earnings in the first year following close.

Our highly complementary portfolio will extend and strengthen HPE’s current leadership position in the growing mission-critical and high performance segments of the server market. This is great news for our customers, partners, investors and employees.

adds Jorge L. Titinger, President and CEO, SGI.

HPE believes that the acquisition of SGI’s highly complementary portfolio, including its in-memory high performance data analytics technology will strengthen its hold on the high performance computing segments of the server market. The combined entity will provide public and private sector customers, including federal agencies and enterprises with larger supercomputer installations. This will be topped off with SGIs HPC and big data analytics suite required to solve challenging data-intensive computing, data management and virtualization problems.

Partnering with a legacy Silicon Valley enterprise, HPE is bolstering its enterprise hardware and software offerings. Commenting on the acquisition, Antonio Neri, executive VP and GM, Hewlett Packard Enterprise, says,

At HPE, we are focused on empowering data-driven organizations. SGI’s innovative technologies and services, including its best-in-class big data analytics and high performance computing solutions, complement HPE’s proven data center solutions designed to create business insight and accelerate time to value for customers.

SGI was founded by Jim Clark in 1981, SGIs initially started working with 3D graphics computer workstations, but its products, strategies and market positions developed significantly over time. It was, however, never able to completely find its footing. After years of decline, it was de-listed from the New York Stock Exchange and filed for bankruptcy in 2009. It was then picked up by Rackable Systems, who decided to retain the SGI branding.

Currently based out of Milpitas, California, SGI has over 1,000 employees with a massive revenue of $533 million in this fiscal year. Some of its key customers include Tagged, Sigma-Aldrich, and the United States Postal Service.


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