Shares of Cray, Inc. (CRAY) soared more than 24 percent in extended trading on Tuesday after the supercomputer company agreed to sell its supercomputing assets to chip maker Intel Corp. (INTC) for $140 million in cash. The deal is expected to close as soon as possible, and surely before the end of the current quarter.
"By broadening our relationship with Intel, we are positioned to further penetrate the HPC market and expand on our industry-leading technologies in support of our Adaptive Supercomputing vision," Cray President and CEO Peter Ungaro said in a statement.
The interconnect hardware development program and related intellectual property that Cray is selling to Intel are used in high-performing computers and includes the the award-winning Gemini interconnect. It also includes the upcoming Aries interconnect, designed to work in Cray's next-generation supercomputer, codenamed "Cascade," which will integrate Intel Xeon processors.
Intel said the deal provides it with "exceptional strategic assets that further enhance Intel's HPC portfolio."
The acquisition of the assets from Cray is expected to accelerate Intel's drive to achieve ExaFLOPS performance by gaining access to Cray's world-class interconnect personnel and intellectual property.
Seattle, Washington-based Cray said it will continue to develop, sell and support current product lines, as well as its next-generation supercomputer code-named "Cascade". It will also retain certain rights to use the transferred assets and intellectual property in Cray products.
Cray noted that about 74 Cray employees will join Intel. The headcount reduction will help Cray save costs in the future, with a small amount of savings to be achieved in 2012 itself.
CRAY closed Tuesday's regular trading session at $7.04, up $0.06 or 0.86% on a volume of 0.19 million shares. The stock soared a further $1.71 or 24.29% in after-hours trading. INTC closed at $27.31, down $0.14 or 0.51% on a volume of 35.01 million shares.
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