Seagate Technology announced its deal to acquire Dot Hill Systems, a supplier of software and hardware storage systems, for $694 million.
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In prepared remarks, Seagate’s president of cloud systems and electronic solutions Phil Brace said the plan was to use Dot Hill’s IP and external storage array-based systems to further its OEM-focused cloud storage systems and solutions business.
Seagate said the transaction should conclude by Q4 of 2015. Dot Hill’s stock closed trading Tuesday at $5.18 per share.
Seagate noted the purchase price is a 50% premium to the average price of Dot Hill stock in the preceding three months.
Dot Hill had $49 million in cash on the balance sheet as of June 30, putting the Colorado-based company at a value of roughly $645 million, according to the announcement.
Dot Hill Systems should prove to be a useful addition to Seagate’s portfolio, what with the myriad of enterprise grade storage arrays, software and data protection services it offers.
The companies expect the sale to close during the fourth quarter, assuming Dot Hill Systems Corp. shareholders tender their shares in support of the move.
Neither Seagate nor Dot Hill responded to enquiries for more information by publication time. The deal is subject to customary closing conditions, including a minimum tender of a majority of outstanding Dot Hill shares and the expiration or termination of any applicable waiting periods under competition laws.
Perella Weinberg Partners served as financial adviser, and Wilson Sonsini Goodrich & Rosati served as primary legal adviser to Seagate in connection with the transaction.
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Morgan Stanley and Needham & Company served as the financial advisors and Cooley served as legal advisor to Dot Hill.
