This IDC Flash covers an acquisition announcement by Seagate Technology. On August 18, 2015, Seagate Technology announced that via a wholly owned indirect subsidiary it plans to acquire Dot Hill Systems in an all-cash transaction valued at approximately $694 million ($645 million plus Dot Hill's $49 million cash reserves). Seagate paid a 50% premium over the preceding three-month stock price average. Seagate plans to complement and expand its storage systems offerings with external storage array–based systems and software products from Dot Hill. According to Seagate, it will leverage Dot Hill's storage technology IP portfolio and software capabilities to drive innovation and provide incremental value to the two companies' combined OEM customer base.
Over the past several years, Seagate has made a number of acquisitions and R&D investments to further extend its value for both OEMs and end users. The storage industry continues to consolidate, and users and solution suppliers alike are relying on commercially available, industry-standard components as the foundation upon which to build a storage solution. This presents an opportunity for both SSD and HDD component suppliers to become larger solution providers, by partnering with software vendors and by leveraging open source software or acquiring their own software IP to offer a more complete solution. Seagate is one company that has identified this opportunity and is pursuing the necessary IP through both organic and inorganic means.
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