Seagate buys Xyratex

Drive maker Seagate has written a cheque for $374 million to buy network and storage equipment maker Xyratex. Xyratex was originally part of IBM, but then spun off to be its own thing.

The cunning plan will mean that Seagate has its paws on testing equipment for its hard disk drives along with storage systems to analyse and manage network data.

Seagate has been trying to own as much of the equipment that it uses lately and this has been helping save its bottom line.

Seagate and for that matter its rival Western Digital have been trying to expand into faster and more energy efficient solid-state drive market. The thought is that while few want hard-drives upgraded on their PCs, there are loads of SSD drives finding their way into mobiles and tablets.

ABC  quoted the company as saying that it expects the deal to close in mid-2014, and add about $500-$600 million in revenue in its fiscal year 2015.

Analysts think that the move will help to strengthen Seagate’s supply and manufacturing chain for disk drives but will probably not change that much.