HPE to Acquire Cray for $1.3 Billion
Need for high-performance computing to make sense of explosion of data cited as prompting the acquisition.
![](https://www.digitalengineering247.com/images/article/HPE_Cray.jpg)
May 17, 2019
Hewlett Packard Enterprise has entered into a definitive agreement under which HPE will acquire Cray Inc. for $35 per share in cash, in a transaction valued at approximately $1.3 billion, net of cash.
In a press release announcing the deal, Antonio Neri, president and CEO, HPE, noted the huge influx of data as a driver for the acquisition.
“Answers to some of society’s most pressing challenges are buried in massive amounts of data. 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. Cray is a global technology leader in supercomputing and shares our deep commitment to innovation. By combining our world-class teams and technology, we will have the opportunity to drive the next generation of high performance computing and play an important part in advancing the way people live and work.”
The explosion of data from artificial intelligence, machine learning, and big data analytics and evolving customer needs for data-intensive workloads are driving a significant expansion in HPC, according to the company.
According to market data as of Oct. 5, 2018, the HPC segment of the market over the next three years is expected to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021, a compound annual growth rate of approximately 9%. Exascale is a growing segment of overall HPC opportunities and more than $4 billion of Exascale opportunities are expected to be awarded over the next five years.
“This is an amazing opportunity to bring together Cray’s leading-edge technology and HPE’s wide reach and deep product portfolio, providing customers of all sizes with integrated solutions and unique supercomputing technology to address the full spectrum of their data-intensive needs,” said Peter Ungaro, president and CEO of Cray. “HPE and Cray share a commitment to customer-centric innovation and a vision to create the global leader for the future of high performance computing and AI. On behalf of the Cray Board of Directors, we are pleased to have reached an agreement that we believe maximizes value and are excited for the opportunities that this unique combination will create for both our employees and our customers.”
Cray has a leadership position in the top 100 supercomputer installations around the globe. The company has a history tying back to Cray Research, which was founded in 1972. It has about 1,300 employees worldwide. The company delivered revenue of $456 million in its most recent fiscal year, up 16% year over year, according to the press release.
Cray recently announced an Exascale supercomputer contract for over $600 million for the U.S. Department of Energy’s Oak Ridge National Laboratory. The system, which is targeted to be the world’s fastest system, will enable groundbreaking research and AI at unprecedented scale, using Cray’s new Shasta system architecture and Slingshot interconnect. The company was also part of an award with Intel for the first U.S. Exascale contract from the U.S. Department of Energy’s Argonne National Laboratory, with Cray’s portion of the contract valued at over $100 million.
HPE says its portfolio will be further strengthened by leveraging Cray’s foundational technologies and adding complementary solutions. The combined company will also reach a broader set of end markets, offering enterprise, academic and government customers a broad range of solutions and deep expertise to solve their most complex problems.
According to the press release, the combination of HPE and Cray is expected to deliver significant customer benefits including:
- Future HPC-as-a-Service and AI / ML analytics through HPE GreenLake
- A comprehensive end-to-end portfolio of HPC infrastructure—compute, high-performance storage, system interconnects, software and services supplementing existing HPE capabilities to address the full spectrum of customers’ data-intensive needs
- Differentiated next-generation technology addressing data intensive workloads
- Increased innovation and technological leadership from leveraging greater scale, combined talent and expanded technology capabilities
- Enhanced supply chain capabilities leveraging US-based manufacturing
As part of the transaction, HPE says it expects to incur one-time integration costs that will be absorbed within HPE’s FY20 free cash flow outlook of $1.9B to $2.1B that remains unchanged. The transaction is expected to close by the first quarter of HPE’s fiscal year 2020, subject to regulatory approvals and other customary closing conditions.
More Cray Coverage
More Hewlett Packard Enterprise Coverage
Subscribe to our FREE magazine,
FREE email newsletters or both!![](http://scg-de.s3.amazonaws.com/images/made/images/article/Ansys_Access_350_170_bor1_b9b3be_s_c1.png)
![](http://scg-de.s3.amazonaws.com/images/made/images/article/DesktopMetal_Studio_5_350_170_bor1_b9b3be_s_c1.png)
![](http://scg-de.s3.amazonaws.com/images/made/images/article/Coreform_Nuclear_Product_350_170_bor1_b9b3be_s_c1.png)
![](http://scg-de.s3.amazonaws.com/images/made/images/article/Authentise-image-1_600_350_170_bor1_b9b3be_s_c1.jpg)