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HPE to Acquire SGI for $275 Million

Bolstering HPC portfolio
This is a Press Release edited by StorageNewsletter.com on 2016.08.12

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Hewlett Packard Enterprise:

  • Strengthens position in $11 billion HPC segment which is growing at an estimated 6-8% CAGR, and in the data analytics segment, which is growing at over twice that rate
  • Expands presence in key HPC verticals such as government, research, and life sciences
     

Hewlett Packard Enterprise Development LP signed a definitive agreement to acquire Silicon Graphics International Corp., in high-performance solutions for compute, data analytics and data management, for $7.75 per share in cash, a transaction valued at approximately $275 million, net of cash and debt.

SGI products and services are used for HPC and big data analytics in the scientific, technical, business and government communities to solve challenging data-intensive computing, data management and virtualization problems. The company has approximately 1,100 employees worldwide, and had revenues of $533 million in fiscal 2016.

"At HPE, we are focused on empowering data-driven organizations," said Antonio Neri, executive VP and GM, enterprise group, HPE. "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."

The explosion of data - in volume and variety, across all sectors and applications - is driving organizations to adopt high-end computing systems to run compute-intensive applications and big data workloads that traditional infrastructure solutions cannot handle. This includes investments in big data analytics to quickly and securely process massive data sets and enable real-time decision making. High-end systems are being used to advance research in weather, genomics and life sciences, and enhance cyber defenses at organizations around the world.

As a result of this demand, according to IDC, the $11 billion HPC segment is expected to grow at an estimated 6-8% CAGR over the next three years, with the data analytics segment growing at over twice that rate.

SGI's complementary portfolio, including its in-memory high-performance data analytics technology, will extend and strengthen HPE's current position in the growing mission critical and high-performance computing segments of the server market.

The combined HPE and SGI portfolio, including services capability, will support private and public sector customers seeking larger supercomputer installations, including U.S. federal agencies as well enterprises looking to leverage high-performance computing for business insights and a competitive edge.

"Our HPC and high-performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE's industry-leading enterprise solutions. This combination addresses today's complex business problems that require applying data analytics and tools to securely process vast amounts of data," said Jorge Titinger, CEO and president, SGI. "The computing power that our solutions deliver can interpret this data to give customers quicker and more actionable insights. Together, HPE and SGI will offer one of the most comprehensive suites of solutions in the industry, which can be brought to market more effectively through HPE's global reach."

Overall, HPE expects the acquisition to be neutral to earnings in the first full year following close and accretive thereafter.

The transaction is expected to close in the first quarter of HPE's fiscal year 2017, subject to regulatory approvals and other customary closing conditions.

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