Seagate splashes $694m on Dot Hill

Storage giant claims it is ready to welcome Dot Hill channel partners

Storage giant Seagate has swallowed Dot Hill Systems in a deal worth $694m (£443m).

Dot Hill, which is headquartered in the US but has operations globally, is a supplier of software and hardware storage systems. It operates a channel model through a number of global reseller and distie partners.

The firm has been snapped up by a wholly owned indirect subsidiary of Seagate for $694m, although because Dot Hill has $49m in cash on its balance sheet, the transaction is valued nearer to $645m, Seagate said.

The storage heavyweight said the acquisition will help it move to the cloud.

"Dot Hill's external storage array-based systems and software products will complement and expand Seagate's storage systems offerings and be offered as part of Seagate's Cloud Systems and Electronics Solutions business," said Seagate.

Phil Brace, Seagate's president of Cloud Systems and Electronics Solutions, added: "Dot Hill's innovative storage systems and IP portfolio are a strategic addition to our storage technology portfolio, enabling us to accelerate the growth of Seagate's OEM-focused cloud storage system and solutions business.

"We are focused on providing the highest-quality storage systems for our OEM customers and Dot Hill's storage solutions will enable us to advance our strategic efforts. We look forward to welcoming Dot Hill's strong team, which has proven experience in developing and delivering best-in-class storage solutions that are trusted by the world's leading IT manufacturers and their channel partners, and we expect the transaction to be accretive to non-GAAP earnings in fiscal 2016."

The deal is subject to customary closing terms.