Thursday, April 2nd 2009

Silicon Graphics to be Acquired by Rackable Systems

Rackable Systems, 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) 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 company's stock.

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 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.Source: SGI
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2 Comments on Silicon Graphics to be Acquired by Rackable Systems

Back in the 80's SGI was the graphics company. They "invented" OpenGL by the way. Thanks to SGI for this. :toast: Whether this is now replaced by DirectX etc. is irrelevant. They got the ball rolling.

IIRC they were the CGI technology company behind nearly all early Hollywood CGI incl. Jurassic Park and Terminator.

RIP. I have no idea why rackable wants what is left. Perhaps they have some nice properties (offices and warehouses) that are in the bankruptcy fire sale. Or some legacy long term gvt contracts ;-)
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A little SGI/Fahrenheit history.
Fahrenheit became the primary focus of development at SGI. Their MIPS-based workstations were quickly losing the performance lead they had in the early 1990s, and the company was in serious trouble as the average PC slowly but surely encroached on the high-end graphics market. SGI saw Fahrenheit as an exit strategy; once complete they would be able to move to a PC-based lineup while still offering the best development tools for a now universal API.
By 1999 it was pretty evident that the project was severely delayed if not doomed - SGI and Microsoft said that it was already a year behind schedule. The problem was the Low Level - contractually Microsoft was supposed to be working on this but in fact resources were working on DirectX 7. SGI was floundering at this time and very frustrated since they could not move on till Microsoft provided the low level interface. SGI soon gave up since they couldn't really sue Microsoft since they were dependant upon them in other areas (like selling Windows PC's. It was also this time that SGI's CEO quit and resurfaced at Microsoft - ain't that a coincience!) They soon gave up and relinquished control of Fahrenheit to Microsoft. Microsoft did release version 1.0 of Fahrenheit Scene Graph in 2000 (as I recall) along with a note that it would no longer be supported - in other words, stillborn. A shame as the interface was quite nice - essentially like Open Inventor but with an eye towards fast execution and access to the underlying graphics API.
I was in school at time for Digital Media (doing projects on an SGI Onyx 2!) so this was fairly large news. It's also the last thing I recall SGI being known for... I'd have to Wiki to find out what they've been doing for the past 9 years...
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