Hewlett Packard Enterprise to Buy Silicon Graphics for $275 Million -- Update
August 11 2016 - 5:52PM
Dow Jones News
By Josh Beckerman
Hewlett Packard Enterprise Co. agreed to buy Silicon Graphics
International Corp. for about $275 million, in a deal that will
enhance HP Enterprise's data analytics and high-performance
computing operations.
HP Enterprise will pay $7.75 a share, a 30% premium to SGI's
closing stock price on Thursday. In after-hours trading, SGI shares
rose 28% to $7.65.
HP Enterprise said the deal expands its presence in sectors
including government, research and life sciences.
SGI makes server, storage and software products. It reported
fiscal fourth-quarter results on Thursday, showing revenue declined
to $123 million from $153 million a year earlier. The Milpitas,
Calif., company has about 1,100 employees.
In November, HP Enterprise split from printer and computer maker
HP Inc. It said in May that it would spin off most of its
technology services operations and merge them with those of
Computer Sciences Corp. in an $8.5 billion transaction.
The remaining HP Enterprise operations will concentrate mainly
on software, server systems, networking and storage hardware.
HP Enterprise said the SGI deal is expected to be neutral to
earnings in the first full year after closing and add to its profit
thereafter.
The share price of HP Enterprise was flat in after-hours trading
at $21.78.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
August 11, 2016 17:37 ET (21:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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