Andre Yoskowitz
25 Dec 2013 14:01
Seagate announced earlier this week that they had acquired Xyratex, the premier maker of hard drive disk (HDD) testing gear, for $374 million which includes the $80 million the company had on its balance sheet.
Xyratex will be integrated directly into Seagate's supply chain. The deal will strengthen Seagate's "vertically integrated supply and manufacturing chain for disk drives and provide uninterrupted access to important capital equipment."
HDD have reached capacities as high as 5TB for consumer drives (which require extensive testing), and the vertical integration of Xyratex should help the company bring in up to $600 million in new revenue by fiscal year 2015, says Seagate.
"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."