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SGI Sells Alias Subsidiary to Accel-KKR
dmehus writes "SGI on Thursday announced it has agreed to sell its Alias subsidiary for $57.5 million in cash to Accel-KKR. Interestingly enough, Accel-KKR owns GroceryWorks, which powers and provides the online version of Safeway. After transaction costs and other items, SGI said it expects net proceeds from the sale come in line at $50 million. Slashdot covered this story in February, saying that SGI was rumoured to be in talks with an unnamed private equity firm, but now it is confirmed."
Now they fixed the story. Now my joke just seems obscurely incorrect.
A company in the position of SGI needs press releases to keep saying "I'm still here". A large percentage of the press releases were about Maya and Alias.
Increases in computer power and wide availability of previously obscure and expensive software has led to big problems for CGI companies. Expect massive losses to be posted by ILM later this year
The Toronto Star reported this as well:
(BUSINESS, Wednesday, February 8, 1995, p.B1)
As part of a three-company merger, Silicon Graphics Inc. of Mountain View, Calif., is expected to pay the equivalent of about $500 million (Canadian) in shares for Toronto-based Alias when the deal closes in June.
Silicon Graphics said it would pay for Alias and Wavefront with shares. The Wavefront purchase price is estimated at about $150 million (U.S.).
Alias stockholders will receive the equivalent of 0.90 of a Silicon Graphics share for every share of Alias stock. Wavefront shareholders will get 0.49 of a share, the announcement added.
The new subsidiary will team with Silicon Studio, a unit formed last year by Silicon Graphics to focus on the entertainment market and to develop software tools.
The software will be used by film makers, game developers and others in the entertainment industry to create interactive titles.
Analysts were largely supportive.
"It's a marriage made in heaven," said Charles Finnie, of Volpe Welty & Co.
I recall Cray be purchased for hundreds of millions then sold [ to Tera ] for tens of millions.
If it is the same KKR as in this article in "Der Spiegel" this might not bode well.
It seems all KKR is known for is in gutting companies and selling the rest for a profit.
If you want to e-mail me, use my PGP Key.
It's good for SGI - they need the money.
Although it's rather sad for anyone who remembers the mid 1990's when the game indstry was starting to move into 3D and SGI was still growing in every direction; Microsoft bought up SoftImage in order to push Windows NT into the workstation market, SGI responded by buying up Alias and Wavefront for millions of dollars in shares.
At that time, SGI had a near monopoly on 3D development systems, but management weren't willing to develop competitive PC-priced desktop systems (An Indy cost around $10,000), even though their engineers could see this happening (SGI's engineers designed Nintendo's Ultra-64).
Selling Alias|Wavefront really marks the end of that era.
Price might be the issue. SGI prices their gear pretty much parallel to the Sun equivilent. Whatever a Sun V880 costs with 8 CPUs is probably what you will pay for an Origin whatever with 8 CPUs (whatever the current comparable product is).
I can only guess SGI screwed up marketing. SGI should still be in competition to Sun, but instead they have kind of faded. There are still certain industries that rely on their hardware, but that appears to be shrinking. Having worked with Power Series to Origin 3800s and Sparcstation 1's to Sun V880s, I think SGI equipment is superior to Sun. Solaris has come further (bigger user base) than IRIX. The lack of Oracle and other big business apps on SGI hardware hurts them. There was some sort of fight between Oracle and SGI I believe.
Oracle was going to release a scalable database appliance based on the SGI Origin 300, from what I heard. The unit would be expandable by bricks. 4 CPUS now, add a router and 16 more later. During this time Oracle lived on IRIX, and from what I heard Oracle was faster on IRIX/SGI than Solaris/Sun... politics kicked in, Oracle yanked support for IRIX, and the damage is done. Without the business apps, you loose quite a bit of market share.
SGI still owns it in the video world. I'm not talking Final Cut Pro, but huge Discreet apps that require insane pipes for uncompressed HD video. Big SGIs can move insane amounts of data.
Southeastern Virginia REPRESENT!
We didn't release a Maya PLE version for IRIX because of the low demand - the cost to make an IRIX version of PLE was too costly. However, we still ship commercial versions on IRIX.
They didn't sell MIPS to any entity. The spun it off as an independent company and gave the SGI stock holders MIPS shares in proportion to their SGI stock holdings. Basically they gave MIPS to SGI stock holders as an independent company.
SideFX is a smaller company than Alias and they have demo versions (which are significantly less restrictive than maya ple) of Houdini for both IRIX and Solaris.