In a deal valued at about $1.4 billion (roughly Rs. 9,848 crores), Hewlett Packard Enterprise Co. has agreed to buy US supercomputer maker Cray Inc. as the firm works to become more competitive in high-end computing.
On Friday, the companies said in a statement that Cray investors will get $35 (roughly Rs. 2,462) a share in cash, confirming an earlier Bloomberg report. That represents a premium of about 17 percent above Thursday’s closing price. The deal values Cray at $1.3 billion (roughly Rs. 9,145 crores) net of cash, the firms said in the statement.
Cray jumped 17 percent to $34.89 (roughly Rs. 2,450) at 9:49 am in New York trading after earlier touching $34.96 (roughly Rs. 2,460), the biggest intraday gain in a year.
Palo Alto-based HP Enterprise gained about 2 percent to $14.82 (roughly Rs. 1,040).
The deal will strengthen HP Enterprise’s position against International Business Machines Corp. According to data compiled by Bloomberg, it could also become HP Enterprise’s biggest since it started trading in 2015, surpassing its acquisition of Nimble Storage Inc. for about $1 billion (roughly Rs. 7,034 crores) more than two years ago.
The company has also committed $4 billion (roughly Rs. 28,126) through 2022 to initiatives to develop artificial intelligence, the Internet of things and distributed computing offerings. Chief Executive Officer Antonio Neri, who succeeded Meg Whitman last year, said in November that HP Enterprise would start to see a return on that investment over the next two years.
Cray Inc was founded in 1972 by Seymour Cray, known as the “father of supercomputing.” This month, it signed a deal to build a new $600 million (roughly Rs. 4,220 crores) system for research on artificial intelligence, weather, subatomic structures, genomics and physics for the US Department of Energy’s Oak Ridge National Laboratory.
The University of Notre Dame, the Pittsburgh Supercomputing Center and chemical giant BASF SE use the HP Enterprise’s own high-end computer systems, according to its website. Last year, it provided supercomputers to the U.S. Department of Defense for helicopter design and weather forecasting in a contract worth $57 million (roughly Rs 401 crores).