Seagate to acquire storage test equipment vendor Xyratex for $374 million

Storage solutions vendor Seagate Technology is set to acquire HDD storage test equipment provider Xyratex for $374 million.

The company has been expanding its presence in the hard disk drive (HDD) business. In 2011, Seagate acquired the hard disk drive business of Samsung Electronics in a deal valued at $1.4 billion to gain select elements of Samsung’s HDD business, including assets, infrastructure and employees that enabled Seagate to drive scale and innovation.

Seagate’s other acquisitions include Acquires Mirra, Maxtor, storage area network provider XIOtech, optical technology developer Quinta, LaCie and stake in Acquire Arcada Software, etc.

In 2013, Seagate announced it was the first hard disk drive manufacturer to ship two billion hard disk drives. It took Seagate 29 years to reach one billion units shipped and just four years to reach the second billion milestone.


Seagate said the acquisition of Xyratex’s HDD capital test equipment business will strengthen Seagate’s supply and manufacturing chain for disk drives and ensure uninterrupted access to important capital equipment.

In addition, the acquisition, which represents a premium of approximately 27 percent per share over Xyratex’s stock price, expands Seagate’s storage solutions portfolio by adding Xyratex’s 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.

Dave Mosley, president of Operations and Technology at Seagate, said access to test equipment becomes an increasingly strategic capability.

Seagate currently expects the transaction to be neutral to Seagate’s earnings per share in its fiscal year 2015. Seagate expects positive cash flow immediately following the transaction and expects revenue contribution to be between $500-$600 million in its fiscal year 2015.

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