Seagate Acquires Xyratex

Seagate (STX) announced it has entered into a definitive agreement to acquire hard drive test equipment maker Xyratex for approximately $374 million. The move will strengthen Seagate’s vertically integrated supply and manufacturing chain for disk drives and ensure uninterrupted access to important capital equipment.  It also adds Xyratex’s enterprise data storage systems and high-performance computing business. Seagate will operate this business as a standalone entity and will focus on opportunities to improve and expand the business.

“This is a strategically important acquisition for Seagate as we continue to focus on delivering best-in-class storage solutions for our customers,” said Dave Mosley, President of Operations and Technology at Seagate. “As the average capacity per drive increases to multi-terabytes, the time to test these drives increases dramatically. Therefore, access to world-class test equipment becomes an increasingly strategic capability. As a premier provider of HDD testing equipment, Xyratex is an important partner and we are excited to integrate these important capabilities which will considerably streamline our supply and manufacturing chain for our core HDD business. We are also pleased to acquire Xyratex’s storage systems and high-performance computing business, which provides us additional opportunities to serve our customers with a broader array of storage solutions.”

According to IDC, Xyratex is ranked as the number one provider of OEM disk storage systems for the fifth consecutive year.  Earlier in 2013 Xyratex acquired the original Lustre trademark, logo, website and associated intellectual property from Oracle. There is some question in the HPC community as to what intentions Seagate has for Lustre intellectual property, and direction for Lustre going forward. Xyratex has also focused on its ClusterStor services this year, with professional services to help partners and end users capture and execute on their storage requirements to best match their most demanding application needs.

“Xyratex is very pleased to become a part of Seagate’s industry-leading organization,” said Ernie Sampias, Chief Executive Officer of Xyratex. “Seagate shares our commitment to innovation and the critical role that test plays in providing the best storage products at the lowest possible cost. After a thorough strategic review process in which we evaluated a wide range of alternatives, the Xyratex Board of Directors determined that this all-cash transaction with Seagate maximizes shareholder value through an attractive premium, and also affirms the significant value that our employees have created.”