Hewlett Packard Enterprise Buying Supercomputer Pioneer Cray for $1.3B
Hewlett-Packard Enterprise will pay $1.3 billion to acquire Cray, a Seattle business that develops software used in supercomputers and other high-powered machines.
High-performance computing technologies, such as those developed by Cray, are seen as central to sorting through “the explosion of data” resulting from innovations in areas like artificial intelligence and data analytics, HPE says.
San Jose, CA-based HPE (NASDAQ: HPE) will pay $35 a share in cash to acquire Cray (NASDAQ: CRAY). That price represents a 17 percent premium over Thursday’s closing price of $29.81 a share. Cray’s stock price closed Friday’s trading session at $36.52 a share.
Supercomputers are widely used in designing weapons; breaking or unlocking encrypted systems; and simulating design and performance of planes, spacecraft, and other vehicles.
“Answers to some of society’s most pressing challenges are buried in massive amounts of data,” Antonio Neri, HPE’s president and CEO, says in a prepared statement. “Only by processing and analyzing this data will we be able to unlock the answers to critical challenges across medicine, climate change, space and more.”
Hewlett-Packard and Cray are both historic giants in the computing business.
HPE was founded in 2015 a successor to Hewlett-Packard, which became a household name in electronics and personal computing through sales of PCs, printers, calculators, and other products. HPE has had its ups and downs since but remains a player—and for startups, a potential acquirer—in Silicon Valley, with a current market capitalization of about $20 billion.
Cray, meanwhile, has grown to about 1,300 employees worldwide and approximately $456 million in annual sales since Seymour Cray founded the company in 1972.
Cray’s customers include weather-monitoring services in the US and other countries, which have used the company’s products to help them model climate and weather events. Over the years, several government agencies have awarded Cray large contracts, including the US Department of Energy and UK Met Office.
HPE’s deal to purchase Cray follows other acquisitions it has made in recent years. HPE acquired Silicon Valley-based Nimble Storage for about $1 billion in March 2017. Earlier that year, HPE bought Westborough, MA-based SimpliVity for $650 million in cash.