What: Shares of Silicon Graphics International Corp. (NASDAQ: SGI) were flying higher today after the hardware maker reported earnings and agreed to be acquired by Hewlett Packard Enterprise (NYSE: HPE). As of 10:53 a.m. EDT, the stock was up 28.7%.
So what: Hewlett Packard Enterprise will pay $275 million, or $7.75 a share, for its longtime competitor, scooping up Silicon Graphics at a time of weakness as the stock as been a consistent disappointment since the recession. HP Enterprise shares were flat on the news.
In its earnings report, SGI turned a profit of breakeven per share, while revenue declined 20% to $123 million. SGI CEO Jorge Titinger explained the deal, saying, “Our HPC (high-performance computing) and high performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE’s industry-leading enterprise solutions.”
