May 17th, 2019 by Adam Armstrong
HPE To Acquire Cray Inc.
Today Hewlett Packard Enterprise (HPE) announced that it has entered a definitive agreement to acquire the global supercomputer company, Cray Inc. This will broaden HPE’s ability to tackle challenges brought up by data-intensive applications, AI, and analysis. The value of the transaction is thought to be roughly $1.3 billion or $35/share of Cray in cash.
The emerging technologies that are becoming more commonplace, AI, ML, IoT, and big data analytics, are changing the ballgame for what customers need moving forward. All of the above technologies are causing a tsunami of data that calls for more HPC type solutions to deal with them. Noting this, along with the expanding segment of the HPC market, HPE is expanding its HPC portfolio through the acquisition of Cray. Cray has been providing high-end supercomputing solutions for some time. Cray is headquartered in Seattle, Washington and has roughly 1,300 employees with the most recent revenue of $456 million.
The combination of HPE and Cray is expected to deliver significant customer benefits including:
- Future HPC-as-a-Service and AI / ML analytics through HPE GreenLake
- A comprehensive end-to-end portfolio of HPC infrastructure – compute, high-performance storage, system interconnects, software and services supplementing existing HPE capabilities to address the full spectrum of customers’ data-intensive needs
- Differentiated next-generation technology addressing data intensive workloads
- Increased innovation and technological leadership from leveraging greater scale, combined talent and expanded technology capabilities
- Enhanced supply chain capabilities leveraging US-based manufacturing
The transaction is expected to close by the first quarter of HPE’s fiscal year 2020, subject to regulatory approvals and other customary closing conditions. As part of the transaction, HPE expects to incur one-time integration costs that will be absorbed within HPE’s FY20 free cash flow outlook of $1.9B to $2.1B that remains unchanged.