SILICON GRAPHICS AND CRAY RESEARCH ANNOUNCE MERGER AGREEMENT
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Union of High-End and Deployable Supercomputing Technologies Allows
Increased Focus on Innovation for High-Volume Market Opportunities
NEW YORK, NY (Feb. 26, 1996) -- Silicon Graphics, Inc. (NYSE:SGI) and Cray
Research, Inc. (NYSE:CYR) today announced that they have entered into a
merger agreement, pursuant to which Silicon Graphics will acquire the
outstanding shares of Cray Research. The combined organizations will unite
Silicon Graphics' commitment to scalable, deployable supercomputing and 3D
visualization with Cray's global leadership in large-scale supercomputing.
The two companies have a combined revenue run rate of nearly $4 billion.
"The combination of Silicon Graphics and Cray Research will create the
world's leading high-performance computing company," said Edward R.
McCracken, chairman and CEO of Silicon Graphics, Inc. "The two companies
share not only a passion for innovation but also a remarkably similar
architectural vision for the future of high-performance computing. The
acquisition of Cray will be instrumental in expanding our scalable
architecture from high-volume, low-cost desktops to teraflops, while
retaining the unequaled brand equity established by Cray as the worldwide
gold standard for supercomputing solutions".
Cray Research is a recognized leader for its technology, its people
and its strong customer base. With the introduction of a string of
landmark systems, the company has created the category of
supercomputing, representing the ultimate in performance for the
scientific and engineering community.
Over the past 18 months, Cray Research has restructured and refocused its
business on the most demanding segments of the high-performance computing
market. With the introduction of powerful new products like the CRAY T90
parallel vector system and the CRAY T3D and CRAY T3E highly scalable
products, Cray Research returned to profitability in the quarter ending
December 31, 1995, and closed that quarter with an all- time high year-end
order backlog of $437 million.
Silicon Graphics is continuing to revolutionize high-performance
computing among systems priced at less than $1 million by leveraging
its open CMOS-based MIPS RISC microprocessor technology into its POWER
CHALLENGE family of shared memory multiprocessor supercomputing
systems.
"Cray's performance portfolio and reputation, combined with Silicon
Graphics' leadership in revolutionizing the entry-level supercomputing
market with deployable solutions, 3D graphics and desktop products, will
position the new organization as the premier supplier of information
technology," said J. Phillip Samper, chairman and CEO of Cray Research, Inc.
"The combination of these two companies will provide not only the world's
most powerful computers, but also the most aggressive price/performance
solutions across a broad spectrum of customer requirements."
The definitive merger agreement has been approved by the Boards of
Directors of Silicon Graphics and Cray Research. Under the terms of the
agreement, Silicon Graphics will make a first step cash tender offer of
$30.00 a share for 19,218,735 shares, approximately 75 percent of the
outstanding common stock of Cray Research. The tender offer is expected to
commence this week. The offer is subject to the tender of at least 51
percent of Cray Research's shares on a fully-diluted basis in the tender
offer and to customary conditions, including required government approvals.
Following completion of the offer, the remaining shares of Cray Research are
expected to be converted at a one to one ratio into Silicon Graphics' stock.
If fewer than 19,218,735 of the shares are purchased in the tenderoffer, the
remaining Cray Research shareholders will receive a fraction of Silicon
Graphics stock and cash for each share so that the aggregate cash and stock
consideration paid in the merger is the same as if the offer had been fully
subscribed. The merger will be accounted for on a purchase accounting basis.
The transaction is expected to be closed in Silicon Graphics' quarter ending
in June 1996.
The closing prices for Silicon Graphics and Cray Research common stock on
Friday, February 23, 1996, the last trading day prior to the board meetings
to approve the transaction, were $27.50 and $25.25 respectively.
This news release contains forward looking statements that involve risks and
uncertainties, including the satisfaction of the conditions to the
transaction and the successful integration of Silicon Graphics and Cray
Research, and other risks detailed from time to time in the SEC reports
filed by Silicon Graphics and Cray Research, including the report on Form
10-Q filed by Silicon Graphics for the quarter ending December 31, 1995, and
the report on Form 10-Q filed by Cray Research for the quarter ended
September 30, 1995. Actual results may vary materially.
Cray Research provides the leading supercomputing tools and services to help
solve customers' most challenging problems. Cray Research, Inc. is
headquartered in Eagan, Minnesota.
Silicon Graphics, Inc. is a leading manufacturer of high-performance and
commercial computing systems. The company delivers interactive three
dimensional graphics, digital media and symmetric multiprocessing
supercomputing technologies to technical and commercial environments through
direct and indirect sales channels. Its subsidiary, MIPS Technologies, Inc.
designs and licenses the industry's leading RISC processor technology for
the computer systems, interactive consumer and embedded control markets.
Silicon Graphics, Inc. has offices worldwide and headquarters in Mountain
View, California.
For More Information Contact:
Jennifer Rothert Piercey (Silicon Graphics, Inc. - Media),
415-933-2019, jpiercey@corp.sgi.com
Marilyn Lattin (Silicon Graphics, Inc. - Financial), 415-933-5070,
mlattin@corp.sgi.com
Steve Conway (Cray Research, Inc. - Media), 612-683-7133,
conways@cray.com
Brad Allen (Cray Research, Inc. - Financial), 612-683-7395,
allebd@cray.com
Silicon Graphics and the Silicon Graphics logo are registered trademarks and
POWER CHALLENGE is a trademark of Silicon Graphics, Inc. MIPS and RISC are
registered trademarks of MIPS Technologies, Inc. Cray is a registered
trademark of Cray Research, Inc.
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-Greg
-- Greg Davis Systems Software Engineer Green Hills Software Phone: (805)965-6044 FAX: (805)965-6343 gdavis@ghs.com