Seagate Technology plc (NASDAQ: STX), a world leader in storage solutions, and Xyratex Ltd (NASDAQ: XRTX), a leading provider of data storage technology, today announced that they have entered into a definitive agreement under which Seagate will acquire all outstanding shares of Xyratex in an all-cash transaction valued at $13.25 per share, or a total of approximately $374 million, including approximately $80 million in cash on Xyratex’s balance sheet as of August 31, 2013. The consideration represents a premium of approximately 27% per share over Xyratex’s stock price at the close of trading on December 20, 2013.
Xyratex has developed a leading hard disk drive (“HDD”) capital test equipment business. The acquisition of this business will further strengthen Seagate’s vertically integrated supply and manufacturing chain for disk drives and ensure uninterrupted access to important capital equipment. The acquisition also expands Seagate’s storage solutions portfolio by adding Xyratex’s industry-leading 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.”
“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.”
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