HPQ HP Inc

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 29% to $7.70.

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 down 1 cent in after-hours trading at $21.77.

Silicon Graphics Inc., founded in 1982, reached a market value of more than $7 billion, but twice filed for bankruptcy protection. Rackable Systems Inc. bought the company's assets for $25 million in 2009 and changed its name to Silicon Graphics International.

According to SGI's website, the company's chief scientist in the late 1990s, John R. Mashey, coined the term "big data."

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

August 11, 2016 18:17 ET (22:17 GMT)

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