HPE Announces That It Plans To Acquire SGI For $275 Million

Hewlett Packard Enterprise (HPE) is stepping up its HPC game through a definitive agreement to acquire SGI, a global leader in high-performance solutions for compute, data analytics and data management. The acquisition is reported as being for $7.75 per share in cash, a transaction valued at approximately $275 million, net of cash and debt. HPE expects the acquisition to be neutral to its earnings in the first full year following close and accretive thereafter. And 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.

Hewlett Packard Enterprise (HPE) is stepping up its HPC game through a definitive agreement to acquire SGI, a global leader in high-performance solutions for compute, data analytics and data management. The acquisition is reported as being for $7.75 per share in cash, a transaction valued at approximately $275 million, net of cash and debt. HPE expects the acquisition to be neutral to its earnings in the first full year following close and accretive thereafter. And 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.

HPE Apollo HPC System

With the explosion of data combined with the highly valuable insights companies can gain from Big Data, several organizations are looking toward high-performance computing (HPC) systems to run compute-intensive applications and big data workloads. Big Data analytics and processing massive data sets to enable real-time decision making are processes that are too much for tradition infrastructure solutions to handle. These HPC systems do more than just help companies gain insight from Big Data as they are more traditionally used for weather, genomics and life sciences, and enhance cyber defenses at organizations around the world.

IDC points at that the demand for HPC is going up as the solutions are being utilized for more and more operations. The HPC segment is currently $11 billion and 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. HPE is seizing on this opportunity through acquiring SGI. SGI specializes in products and services for HPC and Big Data analytics in the scientific, technical, business and government communities designed to solve challenging data-intensive computing, data management, and virtualization problems. As of the acquisition, SGI had 1,100 employees worldwide and revenue of $533 million in fiscal 2016.

The two companies believe that they have complementary product portfolios and go-to-market approaches. The combination of which will be able to strengthen the leading position and financial performance of HPE. HPE believes it will strengthen its lead in the growing mission critical and HPC segments of the server market by adding SGI’s portfolio such as its in-memory high-performance data analytics technology. The new combined portfolio will be attractive to enterprises wanting to leverage HPC for better insights as well as federal agencies looking to enhance cyber defense.  

HPE main site

SGI main site

Discuss this story

Sign up for the StorageReview newsletter