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Hewlett Packard Enterprise to Acquire US Supercomputer Maker Cray
Friday 17 May 2019

17 May 2019 - California, US-based technology company Hewlett Packard Enterprise (NYSE: HPE) and Seattle, US-based supercomputer specialist Cray Inc. (NASDAQ: CRAY) have entered into a definitive agreement under which HPE will acquire Cray for USD 35.00 per share in cash, in a transaction valued at approximately USD 1.3bn, net of cash, the companies said.

Cray is a provider of high-end supercomputing solutions. With a history tying back to Cray Research, which was founded in 1972, Cray is headquartered in Seattle, Washington, with US-based manufacturing, and approximately 1,300 employees worldwide.

The company delivered revenue of USD 456m in its most recent fiscal year, up 16% year over year.

Cray recently announced an Exascale supercomputer contract for over USD 600m for the US Department of Energy's Oak Ridge National Laboratory.

The system, which is targeted to be the world's fastest system, will enable groundbreaking research and AI at unprecedented scale, using Cray's new Shasta system architecture and Slingshot interconnect.

The company was also part of an award with Intel for the first US Exascale contract from the US Department of Energy's Argonne National Laboratory, with Cray's portion of the contract valued at over USD 100m.

High performance computing is a key component of HPE's vision and growth strategy and the company currently offers world-class HPC solutions, including HPE Apollo and SGI, to customers worldwide.

This portfolio will be further strengthened by leveraging Cray's foundational technologies and adding complementary solutions.

The combined company will also reach a broader set of end markets, offering enterprise, academic and government customers a broad range of solutions and deep expertise to solve their most complex problems.

As a result of the enhanced financial profiles of the combined companies, the deal is expected to be accretive to HPE non-GAAP operating profit and earnings in the first full year following the close.

As part of the transaction, HPE expects to incur one-time integration costs that will be absorbed within HPE's FY20 free cash flow outlook of USD 1.9bn to USD 2.1bn that remains unchanged.

The transaction is expected to close by the first quarter of HPE's fiscal year 2020, subject to regulatory approvals and other customary closing conditions.
Details
Date Published: 17/05/2019
Target: Cray Inc
Country: USA
Deal Size: 1.3bn (USD)
Sector: Computer Hardware
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Vendor:
Buyer: Hewlett Packard Enterprise
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