Seagate Technology Plc said it would buy network and storage equipment maker Xyratex Ltd for about $374 million to strengthen its supply and manufacturing chain for disk drives. Xyratex shares were up 27 percent at $13.25 per share in morning trading, matching Seagates offer price. The deal will help Seagate acquire testing equipment for its hard disk drives (HDD) along with storage systems to analyze and manage network data. The acquisition could help Seagate maintain its gross margins at the 27-33 percent level as it begins to own more of the equipment that it uses, FBN Securities analyst Shebly Seyrafi told Reuters.
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