Silicon Graphics sold off cheap to Rackable

Datacentre specialist Rackable said that it would be using the SGI assets it obtains in the deal to bolster its high-performance, cluster and cloud computing business.

"The combined company will be positioned to solve the most demanding business and technology challenges our customers confront today," declared Rackable president and chief executive Mark J. Barrenechea.

The deal came shortly after Silicon Graphics filed for chapter 11 bankruptcy protection in the US. The company had been struggling to stay afloat following a 2006 restructuring and last month was faced with a delisting from the Nasdaq stock exchange.

"We have been working very hard to strengthen our company, and today, we've taken another big step in that direction," said Silicon Graphics chief executive Robert Ewald.

"This transaction represents a compelling opportunity for Silicon Graphics' customers, partners and employees, who can all benefit from the emerging stronger company with better technologies, products and markets reach."

The transaction is expected to close within 60 days, pending an approval of the deal from the US Bankruptcy Court.