Hewlett Packard Enterprise (NYSE: HPE) has agreed to purchase Milpitas, California-based high-performance computing platforms provider Silicon Graphics International (Nasdaq: SGI) for approximately $275 million cash in a push to expand its footprint in the HPC and big data analytics markets.
SGI said Thursday the price of the transaction is $7.75 per share and that both companies expect to close the deal in the first quarter of fiscal year 2017, subject to closing conditions and regulatory approvals.
SGI operates with 1, 100 employees worldwide and posted $533 million in revenue for its 2016 fiscal year.
Antonio Neri, executive vice president and general manager of HPE’s enterprise group, said HPE plans to combine its data center platforms with SGI’s big data analytics and HPC products and services through the transaction.
SGI provides big data analytics and HPC platforms that work to help government agencies, businesses and scientific communities address virtualization and data management challenges.
SGI’s federal business is headquartered in Annapolis Junction, Maryland, and provides HPC, storage, cloud computing, server, data center and other information technology platforms as well as professional services to U.S. federal clients.
HPE said it expects the deal to be earnings neutral in the first year and accretive in years thereafter.
The acquisition comes after HPE agreed to merge its enterprise services segment into Computer Sciences Corp. (NYSE: CSC) in May in an effort to establish a global IT services company with approximately $26 billion in projected annual sales.
International Data Corp. projects the $11 billion HPC market to see a compound annual growth rate of 6 to 8 percent in the next three years driven by the demand for computing systems among organizations to manage big data workloads.