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Smart Global Holdings to acquire Penguin Computing
Posted on Wednesday, 13 June 2018 14:31
Smart Global Holdings (Smart) has agreed to purchase Penguin Computing (Penguin) for a deal worth up to USD 85.00 million.
KKR Credit supplied the debt financing for the transaction and Needham & Company served as financial adviser to the buyer.
Penguin’s investors, which include vSpring Capital, San Francisco Equity Partners and Weber Capital, will exit the company as part of this transaction.
The agreement includes performance based payments of USD 25.00 million that will only take effect if targets agreed prior to the deal, are achieved.
The buyer claims to be a global leader in speciality memory, comprising of custom designs, technical support and memory products which are locally distributed in multiple countries.
Penguin, specialises in compute and storage solutions, which are used in artificial intelligence (AI), machine learning (ML) and state of the art technology products.
As part of the buyer’s new business unit, SMART Specialty Compute & Storage Solutions (SCSS), Penguin will operate as a standalone entity.
Shared infrastructure of Penguin and SCSS will allow Smart the benefit of having its products introduced into the AI and ML markets.
Tom Coull, chief executive of Penguin said: “With this new platform, Penguin will have substantially improved access to capital to drive additional investment in, and further development and growth of our product and service offerings”.
Ajay Shay, chairman of Smart, welcomed the deal, adding that the acquisition would expand its customer base and provide key supplier relationships to the company.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 1,020 deals targeting custom computer programming services providers announced worldwide since the beginning of 2018.
The largest of these is worth USD 1.71 billion and took the form of a capital increase by software technology developer Jinguotou (Dalian) Development.
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