12 August 2016, USA :
Hewlett Packard Enterprise Co. (HPE) agreed to pay about $275 million to buy Silicon Graphics International Corp., a once-influential pioneer in computing hardware that wound up settling into a small industry niche.
HPE said it would pay $7.75 a share, a 30% premium to SGI’s closing stock price on Thursday. SGI shares rose 29% in after-hours trading, while HP Enterprise shares were flat.
“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,” HP said in a statement on the deal.
SGI (originally known as Silicon Graphics) was cofounded in 1981 by Jim Clark, who later cofounded Netscape with Marc Andreessen. Following a years-long decline, and after being de-listed from the New York Stock Exchange, SGI filed for Chapter 11 bankruptcy in 2009. That year it was acquired by Rackable Systems, which later adopted the SGI branding. SGI’s former campus in Mountain View, California, is now the site of the Googleplex.
Taking on a company with shrinking revenues is an interesting choice. HPE CEO’s Meg Whitman’s nearly five-year reign, first as CEO of HP and now of the spin-off company HPE, has been dominated by her attempt to rightsize HP, divest the company of its own shrinking business units, and find some growth markets.