Seagate Technology snaps up Dot Hill Systems in premium deal
Published: 09:50 19 Aug 2015 EDT
US data storage giant Seagate Technology (NASDAQ:STX) is to buy Dot Hill Systems Corp, a supplier of hardware and software solutions, in a deal worth US$694 million.
The purchase is aimed at bolstering Seagate's computer cloud software offerings.
Seagate will pay US$9.75 per share in the all-cash deal.
The consideration represents a 50% premium over the preceding three month average price of Dot Hill shares, it was reported.
Phil Brace, president of cloud systems and electronics solutions at Seagate, told investors: "We are focused on providing the highest quality storage systems for our OEM customers and Dot Hill’s storage solutions will enable us to advance our strategic efforts.
"We look forward to welcoming Dot Hill’s strong team, which has proven experience in developing and delivering best-in-class storage solutions that are trusted by the world’s leading IT manufacturers and their channel partners, and we expect the transaction to be accretive to non-GAAP earnings in fiscal 2016."
The deal is expected to close in the fourth quarter in calendar 2015.
Dot Hill has told investors it expects revenue of between US$245 million and US$260 million for 2015. Seagate’s revenue was $13.7 billion for the year ended July 3.
On Nasdaq, Dot Hill shares raced
