Hewlett Packard Enterprise has signed a definitive agreement to acquire SGI, a solutions provider for compute, data analytics and data management, in a transaction valued at approximately $US275 million.
SGI products and services are used for high-performance computing (HPC) and big data analytics in the scientific, technical, business and government communities to solve challenging data-intensive computing, data management and virtualisation problems.
The company has approximately 1,100 employees worldwide, and had revenues of $533 million in fiscal 2016.
“At HPE, we are focused on empowering data-driven organizations," Hewlett Packard Enterprise executive vice president and general manager, Enterprise Group, Antonio Neri, said.
"SGI's innovative technologies and services, including its best-in-class big data analytics and high-performance computing solutions, complement HPE's proven data center solutions designed to create business insight and accelerate time to value for customers.”
Neri said the “explosion of data” - in volume and variety, across all sectors and applications - is driving organisations to adopt high-end computing systems to run compute-intensive applications and big data workloads that traditional infrastructure solutions cannot handle.
According to Neri, this includes investments in big data analytics, with high-end systems are being used to advance research in weather, genomics and life sciences, and enhance cyber defences at organisations around the world.
As a result of this demand, IDC reports that the $11 billion HPC segment is expected to grow at an estimated 6-8 percent CAGR over the next three years, with the data analytics segment growing at over twice that rate.
Neri said SGI's “highly complementary” portfolio, including its in-memory high-performance data analytics technology, will extend the vendor’s current leadership position in the growing mission critical and high-performance computing segments of the server market.
“The combined HPE and SGI portfolio, including a comprehensive services capability, will support private and public sector customers seeking larger supercomputer installations, including U.S. federal agencies as well enterprises looking to leverage high-performance computing for business insights and a competitive edge,” Neri explained.
HPE and SGI believe that by combining complementary product portfolios and go-to-market approaches they will be able to strengthen the leading position and financial performance of the combined business.
Overall, HPE expects the acquisition to be neutral to earnings in the first full year following close and accretive thereafter.
“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,” SGI CEO and president, Jorge Titinger, added.
“This combination addresses today's complex business problems that require applying data analytics and tools to securely process vast amounts of data.
“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.”
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.