HPE completes acquisition of supercomputing leader Cray Inc.

HPC is a key component of HPE’s vision and growth strategy

San Jose, Calif., Sep­tem­ber 25, 2019 – Hew­lett Packard Enter­pri­se (NYSE:HPE) today announ­ced it has com­ple­ted the acqui­si­ti­on of super­com­pu­ting lea­der Cray Inc., ear­lier than the ori­gi­nal tar­get date. HPE paid $35.00 per share, in a tran­sac­tion valued at appro­xi­mate­ly $1.4 bil­li­on, net of cash.

The explo­si­on of data is dri­ving a signi­fi­cant expan­si­on of high per­for­mance com­pu­ting (HPC) as cus­to­mers seek to unlock the power of their data through arti­fi­cial intel­li­gence, machi­ne lear­ning, and big data ana­ly­tics, requi­ring tech­no­lo­gies that can power exas­ca­le-class per­for­mance. Over the next three years, the HPC seg­ment of the mar­ket and asso­cia­ted sto­rage and ser­vices is expec­ted to grow from appro­xi­mate­ly $28 bil­li­on in 2018 to appro­xi­mate­ly $35 bil­li­on in 20211.

HPC is a key com­po­nent of HPE’s visi­on and growth stra­te­gy as it pro­vi­des the back­bone to pro­cess, ana­ly­ze and extract insights from mas­si­ve amounts of data. The com­bi­na­ti­on of HPE and Cray is expec­ted to deli­ver signi­fi­cant cus­to­mer bene­fits and future offe­rings including:

  • Enhan­ced port­fo­lio: Extends HPE’s indus­try-lea­ding HPC and AI port­fo­lio, which pro­vi­des more choice and fle­xi­bi­li­ty for data inten­si­ve workloads; 

  • Tech­no­lo­gy inno­va­ti­on: Incre­a­ses R&D infra­st­ruc­tu­re and exper­ti­se to acce­le­ra­te deve­lo­p­ment of new pro­ducts and solutions; 

  • Ser­vice and sup­port: Aug­ments world­wi­de capa­bi­li­ties and coverage, espe­cial­ly wit­hin Super­com­pu­ting, whe­re high cus­to­mer touch is paramount; 

  • Exas­ca­le lea­ders­hip: Super­com­pu­ting lea­ders­hip demons­tra­ted by win­ning the first three exas­ca­le sys­tems in the United Sta­tes; and 

  • HPC-as-a-Ser­vice and AI / ML ana­ly­tics through HPE Green­La­ke offe­ring cus­to­mers choice, fle­xi­bi­li­ty and speed to market.

Brin­ging tog­e­ther Cray and HPE estab­lis­hes the most com­pre­hen­si­ve end-to-end port­fo­lio across com­pu­te, sto­rage, soft­ware and ser­vices in the fast-gro­wing high per­for­mance com­pu­ting and arti­fi­cial intel­li­gence mar­ket seg­ments,” said Phil Davis, pre­si­dent, Hybrid IT, Hew­lett Packard Enter­pri­se. “But, the real value is what we can accom­plish tog­e­ther as one team. We are united in our visi­on to be a glo­bal lea­der in high per­for­mance com­pu­ting. By com­bi­ning the teams’ deep exper­ti­se and R&D engi­nes, we are bet­ter posi­tio­ned to help our cus­to­mers sol­ve their most data-inten­si­ve chal­len­ges both today and well into the future.”

As part of the acqui­si­ti­on, Cray pre­si­dent and CEO Peter Unga­ro, will join HPE as head of the HPC and AI busi­ness unit in Hybrid IT.

For almost 50 years, Cray has been dedi­ca­ted to being a lea­der in super­com­pu­ting in sup­port of our cus­to­mers’ most important mis­si­ons,” said Peter Unga­ro, pre­si­dent and CEO at Cray. “Cray and HPE have a shared visi­on for the new exas­ca­le era, and by joi­ning for­ces, we’re offe­ring the pro­mi­se of Cray’s tech­no­lo­gy to an expan­ded mar­ket with the oppor­tu­ni­ty to leverage HPE’s bre­adth, sca­le and inno­va­ti­on to bring super­com­pu­ting to the enter­pri­se. I’m exci­ted for this next chap­ter, and on behalf of our com­pa­ny and Board of Direc­tors I’d like to thank our valued cus­to­mers, part­ners, share­hol­ders and, of cour­se, our employees, for all of their con­tri­bu­ti­ons in making Cray a lea­der in high-per­for­mance computing.”

Both HPE and Cray con­ti­nue to win new cus­to­mers. For instance, in the last two quar­ters, The Depart­ment of Ener­gy has selec­ted Cray’s Shas­ta super­com­pu­ting sys­tems and Slings­hot inter­con­nect for the first three exas­ca­le sys­tems in the United Sta­tes. Cray has gene­ra­ted more than $1.5B in boo­kings to date for its new Shas­ta super­com­pu­ting systems.

HPE also recent­ly announ­ced a four-year, mul­ti-pha­se col­la­bo­ra­ti­on bet­ween HPE and NASA’s Ames Rese­arch Cen­ter to build a new super­com­pu­ter, which NASA has named “Ait­ken,” based on the HPE SGI 8600 sys­tem. Ait­ken will sup­port mode­ling and simu­la­ti­ons of ent­ry, descent and lan­ding for future lunar landings.

Tog­e­ther, HPE and Cray will crea­te grea­ter oppor­tu­nities for growth — and lead the exas­ca­le era of high per­for­mance com­pu­ting through an inte­gra­ted plat­form, broa­der sca­le and com­bi­ned resources.

Tran­sac­tion Details

Cray is ano­t­her examp­le of HPE suc­cess­ful­ly acce­le­ra­ting its stra­te­gy and enhan­cing its com­pe­ti­ti­ve posi­ti­on through acqui­si­ti­ons. Brin­ging tog­e­ther HPE and Cray enab­les an enhan­ced finan­cial pro­fi­le for the com­bi­ned com­pa­ny. The acqui­si­ti­on is expec­ted to be accre­ti­ve to HPE non-GAAP ope­ra­ting pro­fit and ear­nings in HPE’s fis­cal year 2020. HPE will dis­cuss how the inte­gra­ti­on of Cray sup­ports signi­fi­cant eco­no­mic upsi­de through enhan­ced growth and pro­fi­ta­bi­li­ty at its Secu­ri­ties Ana­lyst Mee­ting on Octo­ber 23, 2019.

About Hew­lett Packard Enterprise

Hew­lett Packard Enter­pri­se is a glo­bal tech­no­lo­gy lea­der focu­sed on deve­lo­ping intel­li­gent solu­ti­ons that allow cus­to­mers to cap­tu­re, ana­ly­ze and act upon data seam­less­ly from edge to cloud. HPE enab­les cus­to­mers to acce­le­ra­te busi­ness out­co­mes by dri­ving new busi­ness models, crea­ting new cus­to­mer and employee expe­ri­en­ces, and incre­a­sing ope­ra­tio­nal effi­ci­en­cy today and into the future.

For­ward-loo­king Statements

This docu­ment con­tains for­ward-loo­king state­ments wit­hin the mea­ning of the safe har­bor pro­vi­si­ons of the Pri­va­te Secu­ri­ties Liti­ga­ti­on Reform Act of 1995. Such state­ments invol­ve risks, uncer­tain­ties and assump­ti­ons. If such risks or uncer­tain­ties mate­ria­li­ze or such assump­ti­ons pro­ve incor­rect, the results of HPE and its con­so­li­da­ted sub­si­dia­ries could dif­fer mate­ri­al­ly from tho­se expres­sed or implied by such for­ward-loo­king state­ments and assump­ti­ons. All state­ments other than state­ments of his­to­ri­cal fact are state­ments that could be deemed for­ward-loo­king state­ments, inclu­ding, but not limi­ted to, any state­ments regar­ding the expec­ted bene­fits and cos­ts of the tran­sac­tion con­tem­pla­ted by this docu­ment, inclu­ding enhan­ced oppor­tu­nities for growth, the deli­very of cus­to­mer bene­fits and the rea­liz­a­ti­on of syn­er­gies and other eco­no­mic bene­fits; pro­jec­tions of reve­nue, expen­ses, net ear­nings, ope­ra­ting pro­fit, cash flows, or other finan­cial items; any state­ments con­cer­ning the expec­ted deve­lo­p­ment, per­for­mance, mar­ket share or com­pe­ti­ti­ve per­for­mance rela­ting to pro­ducts or ser­vices; any state­ments regar­ding cur­rent or future macroeco­no­mic trends or events and the impact of tho­se trends and events on HPE and its finan­cial per­for­mance; any state­ments of expec­ta­ti­on or belief; and any state­ments of assump­ti­ons under­ly­ing any of the fore­go­ing. Risks, uncer­tain­ties and assump­ti­ons inclu­de the pos­si­bi­li­ty that expec­ted bene­fits may not mate­ria­li­ze as expec­ted; that the inte­gra­ti­on of the acqui­si­ti­on post-clo­sing may not occur as anti­ci­pa­ted, and the com­bi­ned com­pa­nies’ abi­li­ty to achie­ve the growth pro­spects and syn­er­gies expec­ted from the tran­sac­tion, as well as delays, chal­len­ges and expen­ses asso­cia­ted with inte­gra­ting the com­bi­ned com­pa­nies’ exis­ting busi­nes­ses may incur; that the par­ties are unab­le to suc­cess­ful­ly imple­ment inte­gra­ti­on stra­te­gies; the need to address the many chal­len­ges facing HPE’s busi­ness; the com­pe­ti­ti­ve pres­su­res faced by HPE; risks asso­cia­ted with exe­cu­ting stra­te­gy; the impact of macroeco­no­mic and geo­po­li­ti­cal trends and events; the deve­lo­p­ment and tran­si­ti­on of new pro­ducts and ser­vices and the enhan­ce­ment of exis­ting pro­ducts and ser­vices to meet cus­to­mer needs and respond to emer­ging tech­no­lo­gi­cal trends and other risks that are descri­bed in HPE’s SEC reports, inclu­ding but not limi­ted to the risks descri­bed in HPE’s Annu­al Report on Form 10‑K for its fis­cal year ended Octo­ber 31, 2018, and sub­se­quent quar­ter­ly reports on Form 10‑Q, and that are other­wi­se descri­bed or updated from time to time in other filings with the SEC. HPE assu­mes no obli­ga­ti­on and does not intend to update the­se for­ward-loo­king statements.


1 Source: Hype­ri­on May 2019