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HP Enterprise confirms deal to buy supercomputer maker Cray

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HP Enterprise confirms deal to buy supercomputer maker Cray

San Jose, Calif.-based information technology company Hewlett Packard Enterprise Co. said it had entered a definitive agreement to buy supercomputing solutions provider Cray Inc. in a deal valued at $1.3 billion, net of cash, confirming earlier media reports.

Hewlett Packard Enterprise, which will buy Cray for $35.00 per share in cash, said the acquisition would complement its drive to expand in the high-performance computing segment of the market, which is expected to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021.

Cray is headquartered in Seattle with US-based manufacturing and approximately 1,300 employees worldwide. The company delivered revenue of $456 million in its most recent fiscal year, up 16% year over year.

The transaction is expected to close by the first quarter of Hewlett Packard Enterprise's fiscal year 2020, subject to regulatory approvals and other customary closing conditions. The acquisition will be accretive to Hewlett Packard Enterprise's non-GAAP operating profit and earnings in the first full year following the close.

As part of the transaction, Hewlett Packard Enterprise expects to incur one-time integration costs that will be absorbed within Hewlett Packard Enterprise's fiscal year 2020 free cash flow outlook of $1.9 billion to $2.1 billion that remains unchanged.