Feeds

Rackable free to pick SGI carcass

Court OKs $42.5m buy

Beginner's guide to SSL certificates

Niche server maker Rackable Systems said this morning that the U.S. bankruptcy court in New York handling the Chapter 11 proceedings for supercomputer maker Silicon Graphics has approved Rackable's acquisition of most of the assets of SGI.

Under the deal that was announced on April 1, the same day that SGI filed for bankruptcy protection, Rackable said it would be shelling out $25m to acquire most of the assets of SGI as well as assuming "certain liabilities" that were not specified. In the announcement today, that figure has risen to $42.5m in cash. The liabilities that Rackable is assuming have not been detailed.

"We are pleased with today's news," said Mark Barrenechea, president and chief executive officer at Rackable in a statement. "With this acquisition, Rackable will be positioned to solve the most demanding business and technology challenges our customers confront today. We believe we will have a stronger company with differentiated product lines and professional services; reaching commercial, government and scientific sectors on a worldwide basis."

Rackable had $171.9m in cash as its fiscal 2008 year ended on January 3 and can certainly afford to pay more money for SGI's assets. In mid-February, when it reported its full year 2008 results, with sales down 29.4 per cent to $247.4m and a net loss of $31.3m, the company said its board had allocated $40m to share buybacks and that it would allocated as much as $17m on additional R&D, sales, and marketing spending in fiscal 2009.

When the SGI deal was announced, the share repurchases were canceled and the company had buy SGI without hitting its cash pile too hard. This is a good way to acquire some very good technology and a fairly large customer base on the cheap.

Not that Rackable has it easy now. The company has cut its employee ranks twice in the past year as business for its dense, rack-based server products have plummeted in the face of the economic meltdown, from 378 down to 270. And it remains to be seen what people will make the jump from SGI to Rackable when this deal is completed on or around May 8. And SGI's own business has been on the rocks, with sales of $348.5m in the twelve months of calendar 2008 and losses of $157.8m.

Rackable reports its first quarter fiscal 2009 financial results on May 5 after the markets close and will discuss its plans for integrating Rackable and SGI technology and people at that time. ®

Remote control for virtualized desktops

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
Microsoft adds video offering to Office 365. Oh NOES, you'll need Adobe Flash
Lovely presentations... but not on your Flash-hating mobe
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.