FREMONT, Calif. & SUNNYVALE, Calif., Apr 01, 2009 (BUSINESS WIRE) -- Rackable
Systems, Inc. (NASDAQ:RACK), a leading provider of servers and
storage products for medium to large-scale data centers, today announced
its agreement to acquire substantially all the assets of Silicon
Graphics, Inc. (SGI) (NASDAQ:SGIC) for approximately $25 million in
cash, subject to adjustment in certain circumstances, plus the
assumption of certain liabilities associated with the acquired assets.
The combined businesses will provide customers with market leading
hardware and software technology within large-scale x86 cluster
computing, HPC, Internet, Cloud Computing, large-scale data storage
environments and visualization platforms across many verticals and
geographies. This combination is also expected to result in a stronger
global services organization; reaching commercial, government and
scientific sectors on a worldwide basis.
"The combined company will be positioned to solve the most demanding
business and technology challenges our customers confront today," said
Mark J. Barrenechea, president and CEO of Rackable Systems. "In
addition, this combination gives us the potential for significant
operational synergies, a strong balance sheet, and positions the
combined company for long-term growth and profitability."
"We have been working very hard to strengthen our company, and today,
we've taken another big step in that direction," stated Robert "Bo"
Ewald, CEO of Silicon Graphics. "This transaction represents a
compelling opportunity for Silicon Graphics' customers, partners and
employees, who can all benefit from the emerging stronger company with
better technologies, products and markets reach."
Barrenechea added, "Together, we believe we will be a much stronger
entity with great products and people offering a compelling proposition
to compete more effectively in, and across, our collective markets."
Rackable has signed an Asset Purchase Agreement to acquire substantially
all the assets of SGI, and to assume certain liabilities relating to the
assets, pursuant to Chapter 11 of the U.S. Bankruptcy Code, under which
SGI filed its petition in New York on April 1, 2009. Completion of the
transaction is subject to a number of closing conditions, including the
approval of the Bankruptcy Court, and other uncertainties. Subject to
such conditions and uncertainties, the transaction is expected to close
within approximately 60 days. It is expected that SGI's business
operations will continue during the pre-closing period. SGI's
international operations would be part of the sale, but would not be
part of the bankruptcy process.
Rackable also announced today that it had suspended its previously
announced program including the repurchase of up to $40 million of the
Conference Call Information
Rackable Systems will discuss the intent to acquire SGI in a conference
call at 2:00 p.m. PST today. The public is invited to listen to a live
web cast of the call on the Investor Relations section of the Rackable's
website at investors.rackable.com.
A replay of the webcast will be available approximately two hours after
the conclusion of the call and remain available until the next earnings
call. An audio replay of the conference call will also be made available
approximately two hours after the conclusion of the call. The audio
replay will remain available for five days and can be accessed by
dialing 1-719-457-0820 or toll free 888-203-1112 and entering the
confirmation code: 6691284.
About Rackable Systems
Rackable Systems, Inc. (NASDAQ:RACK) is a leading provider of
Eco-Logical(TM) servers and storage for medium- to large-scale data center
deployments. Rackable's products, available for purchase or lease, are
designed to provide benefits in the areas of density, thermal
efficiency, serviceability, power distribution, data center mobility and
remote management. Founded in 1999 and based in Fremont, California,
Rackable Systems is a founding member of The Green Grid and serves cloud
computing and services, enterprise software, federal government, digital
media, financial services, oil and gas exploration and HPC customers
worldwide. Additional information available at www.rackable.com.
About Silicon Graphics Inc (SGI)
SGI (NASDAQ:SGIC), is a leader in high-performance computing. SGI
delivers a complete range of high-performance server, visualization, and
storage solutions along with industry-leading professional services and
support that enable its customers to overcome the challenges of complex
data-intensive workflows and accelerate breakthrough discoveries,
innovation and information transformation. Headquartered in Sunnyvale,
California, the company can be found on the Web at www.sgi.com.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements, including
statements regarding the proposed acquisition, anticipated product
performance, general business outlook and projected results of
operations. Any statements contained herein that are not statements of
historical fact may be deemed forward-looking statements. Actual results
may differ materially from forward-looking statements due to a number of
risks and uncertainties including: the risk that the bankruptcy court
may not approve the proposed acquisition; negotiations with SGI or
conditions to closing of the acquisition may fail; competing parties may
outbid Rackable in the bankruptcy proceedings; liabilities assumed by
Rackable in the acquisition may be greater than anticipated; key
personnel may not remain with Rackable following the closing; the
anticipated synergies of the combined companies and the potential cost
reductions may not be achieved; and the combined operations may not be
successfully integrated in a timely manner, if at all. Detailed
information about other potential factors that could affect Rackable
Systems' business, financial condition and results of operations is
included in Rackable Systems' annual report on Form 10-K under the
caption "Risk Factors," in Part I, Item 1A of that report, filed with
the Securities and Exchange Commission ("SEC") on March 19, 2009, as
updated by Rackable Systems' subsequent filings with the SEC, all of
which are available at the SEC's Web site at http://www.sec.gov.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this report. Rackable
Systems undertakes no responsibility to update the information in this
SOURCE: Rackable Systems, Inc.
Rackable Systems, Inc.
Mark Paisley, 510-933-8382
Senior Director, Investor Relations
Jen Spark, 415-512-0770
Silicon Graphics Inc.
Bob Pette, 408-524-2810
Vice President, Corporate Marketing
Copyright Business Wire 2009