Electronic data storage device maker Seagate Technology said Tuesday it will buy data storage system maker Dot Hill Systems for $9.75 per share.
The companies valued the deal at $645 million, excluding Dot Hill's cash on hand.
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The per share price is an 88 percent premium to where Dot Hill's stock closed Tuesday, at $5.18. In after-market trading, the stock surged $4.42, or 85 percent, to $9.60.
Dublin-based Seagate makes hard disk drives, solid state drives, high performance computing devices and provides data storage services, and Dot Hill Systems makes storage systems. Seagate says Dot Hill will become part of its cloud systems and electronics solutions business
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.
Seagate Technology PLC reported $13.74 billion in revenue in its last fiscal year, which ended in July. Dot Hill Systems, of Longmont, Colorado, had $217.7 million in revenue in 2014.