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Hewlett Packard Enterprises (HPE) to Buy Silicon Graphics (SGI) for $275 Million
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Shares of Silicon Graphics were up 28% after-hours on news that it is to be acquired by Hewlett Packard Enterprises (HPE - Free Report) for $275 million, or $7.75/share. HPE is not to be confused with HP Inc. (HPQ - Free Report) , the computer and printing division of the original parent company, Hewlett-Packard.
Based in Fremont, CA, Silicon provides high-performance computing (HPC) services such as servers, storage, and data center solutions to clients in the cloud computing, oil & gas, e-commerce, social networking, and other industries.
“At HPE, we are focused on empowering data-driven organizations,” said Antonio Neri, executive vice president and general manager of Hewlett Packard Enterprise. “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.”
The rise of cloud computing and data processing software has been notable. This deal continues a merger trend in the industry, with Intel Co. (INTC - Free Report) recently announcing plans to purchase deep-learning startup Nervana Systems for $400 million.
Although Intel currently dominates the HPC market, Hewlett Packard hopes to use its synergies with SGI to “strengthen the leading position and financial performance of the combined businesses,” as per the official announcement.
Hewlett Packard expects the acquisition to have no effect on earnings in the first full year following its closing, and then an accretive effect from there onward. The company expects the deal to close in the first quarter of 2017.
Hewlett Packard has seen just one earnings estimate revision in the last 60 days, a downward revision for next fiscal year from $2.03 to $2.02 in earnings per share. It has seen a year-to-date price change of 42.8%, and is in an industry that ranks in the top 39% of the Zacks Industry Rank.
Hewlett Packard Enterprises currently sits at a Zacks Rank #4 (Sell) due to the aforementioned earnings estimate revision.
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Hewlett Packard Enterprises (HPE) to Buy Silicon Graphics (SGI) for $275 Million
Shares of Silicon Graphics were up 28% after-hours on news that it is to be acquired by Hewlett Packard Enterprises (HPE - Free Report) for $275 million, or $7.75/share. HPE is not to be confused with HP Inc. (HPQ - Free Report) , the computer and printing division of the original parent company, Hewlett-Packard.
Based in Fremont, CA, Silicon provides high-performance computing (HPC) services such as servers, storage, and data center solutions to clients in the cloud computing, oil & gas, e-commerce, social networking, and other industries.
“At HPE, we are focused on empowering data-driven organizations,” said Antonio Neri, executive vice president and general manager of Hewlett Packard Enterprise. “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.”
The rise of cloud computing and data processing software has been notable. This deal continues a merger trend in the industry, with Intel Co. (INTC - Free Report) recently announcing plans to purchase deep-learning startup Nervana Systems for $400 million.
Although Intel currently dominates the HPC market, Hewlett Packard hopes to use its synergies with SGI to “strengthen the leading position and financial performance of the combined businesses,” as per the official announcement.
Hewlett Packard expects the acquisition to have no effect on earnings in the first full year following its closing, and then an accretive effect from there onward. The company expects the deal to close in the first quarter of 2017.
Hewlett Packard has seen just one earnings estimate revision in the last 60 days, a downward revision for next fiscal year from $2.03 to $2.02 in earnings per share. It has seen a year-to-date price change of 42.8%, and is in an industry that ranks in the top 39% of the Zacks Industry Rank.
Hewlett Packard Enterprises currently sits at a Zacks Rank #4 (Sell) due to the aforementioned earnings estimate revision.
The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>