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HPE buying SGI for £212 million

Hewlett Packard Enterprise (HPE) announced recently, that it is acquiring SGI, for a total of $275 million (£212m). It is still subject of regulatory approvals. At $7.75 per share, the acquisition will see HPE pay in both cash and debt.

SGI is a company whose products and services are used for high-performance computing and big data analytics. It has more than 1,000 employees worldwide, and has earned $533 million (£411m) in fiscal 2016.

HPE is looking to increase its portfolio in the high-performance computing segments of the server market, which it considers a ‘growing mission critical market’.

According to HPEs press release, following the acquisition, the company will be able to support both private and public sector customers looking for larger supercomputer installations. Its customers might include the likes of US federal agencies, or enterprises looking for high-performance computing.

"At HPE, we are focused on empowering data-driven organizations," said Antonio Neri, executive vice president and general manager, Enterprise Group, Hewlett Packard Enterprise. "SGI's innovative technologies and services, including its best-in-class big data analytics and high-performance computing solutions, complement HPE's proven data centre solutions designed to create business insight and accelerate time to value for customers."

HPE is expecting the acquisition to be neutral, in terms of earnings, in the first year. The transaction should be closed in Q1 of 2017 (HPE fiscal year).

"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."