Rackable puts $25m offer in for SGI

Rackable puts $25m offer in for SGI

Summary: On Wednesday, the storage supplier Rackable Systems surprised many people with the announcement that it wanted to buy the assets of Silicon Graphics International (SGI) for $25m (£17.3m).

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TOPICS: After Hours
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On Wednesday, the storage supplier Rackable Systems surprised many people with the announcement that it wanted to buy the assets of Silicon Graphics International (SGI) for $25m (£17.3m).

One reason for the surprise was that also on Wednesday, SGI filed for bankruptcy protection with debts of $526.5m on assets of $390.5m.

A company spokesperson for Rackable said that an offer had been made and now it will wait for some details to be cleared up before any deal can be finalised. In a statement Rackable said any deal was "subject to adjustment in certain circumstances, plus the assumption of certain liabilities associated with the acquired assets" or as the spokesperson put it, "some whatnot".

The spokesperson also told ZDNet UK that it was expected that the sale of SGI's assets would be completed within 60 days.

According to Reuters, SGI's operations would be part of any sale but would not be part of the bankruptcy process.

SGI had only just emerged from a previous Chapter 11 bankruptcy in 2006. That experience was blamed on declining revenue and increased competition.

For its part, Rackable said that it had suspended its previously announced plan to repurchase of up to $40m of its own stock.

Topic: After Hours

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Colin Barker is based in London and is Senior Reporter for ZDNet. He has been writing about the IT business for some 30-plus years. He still enjoys it.

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