HP Enterprise to buy supercomputer pioneer Cray - TechCentral

HP Enterprise to buy supercomputer pioneer Cray

Hewlett Packard Enterprise has agreed to buy US supercomputer maker Cray in a deal valued at about US$1.4-billion as the firm works to become more competitive in high-end computing.

Cray investors will get $35/share in cash, the companies said in a statement on Friday. That represents a premium of about 17% above Thursday’s closing price. The deal values Cray at $1.3-billion net of cash, the firms said in the statement.

Cray jumped 17% to $34.89 at 9.49am in New York trading after earlier touching $34.96, the biggest intraday gain in a year. Palo Alto-based HP Enterprise gained about 2% to $14.82.

The deal will help HP Enterprise strengthen its position against IBM. It could also become HP Enterprise’s biggest since it started trading in 2015, surpassing its acquisition of Nimble Storage for about $1-billion more than two years ago.

HP Enterprise has mostly been paring down since it was created from the breakup of Hewlett-Packard. In 2017, it completed a spin-off and merger of its enterprise services business with Computer Sciences Corp. It’s also separated some software assets in an $8.8-billion deal with UK-based Micro Focus International.

ROI

Still, the company has also committed $4-billion through to 2022 to initiatives to develop artificial intelligence, the Internet of things and distributed computing offerings. CEO 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.

Loss-making Cray traces its roots back to a company founded in 1972 by Seymour Cray, known as the “father of supercomputing”. This month, it signed a deal with the US department of energy’s Oak Ridge National Laboratory to build a new $600-million system for research on artificial intelligence, weather, subatomic structures, genomics and physics.

HP Enterprise’s own high-end computer systems are used by the University of Notre Dame, the Pittsburgh Supercomputing Center and chemical giant BASF, according to its website. Last year, it won a $57-million contract to provide supercomputers to the US department of defence for helicopter design and weather forecasting.  — Reported by Liana Baker and Ed Hammond, with assistance from Kiel Porter and Ian King, (c) 2019 Bloomberg LP

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