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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."
Blah, blah blah.
Accel-KKR also owns globalCoal and Savista just another shark trying to get a corner on the market so they can control it. I am interested where globalCoal fits into the big picture though...
Look, see, understand
I would like to see Maya at Sourceforge. THAT would be a news for nerds and stuff that matters.
There you are, staring at me again.
...but damn, I do love seeing that old-school Silicon Graphics logo /. uses for the increasingly rare SGI post. Whatever mojo SGI had left was certainly gone after they went with that Comic Sans-looking text logo...
SGI doesn't have any other consumer products, and what the Maya product needs now is marketing. There's really not too many other things they can do to develop the product left... it's a matter of sales more than development.
The Oakland tribute reports that a Billionaire increases Safeway stake. Accel-KKR owns GroceryWorks which is Safeway, Inc. exclusive online shopping provider.
Not only that, but KKR (not Accel-KKR) used to own Safeway. This was a few years back. They purchased it cheap, held on to it for a while, and made an absolute killing when they sold it. KKR are no fools (RJR notwithstanding).
It's good for SGI. They're in a position of a) needing money -- and $50m is nothing to be sneezed at, and b) needing publicity. This gives them a way to show the business world that they are still alive (even if they are selling their own organs to remain so) in the hopes that other companies may look at what SGI are working on and make an offer for some of it. If that happens, SGI gets more revenue, and slims down it's business to the point where it can focus on key projects to increase its revenue stream.
I am not any kind of business analyst, I just play one on the internet.
SGI paid $500 million to buy them in the first place. Boy, how times have changed.
NEW YORK, Feb. 7 / -- Silicon Graphics, Inc. (NYSE: SGI), Alias Research, Inc.
(Nasdaq-NNM:ADDDF), and Wavefront Technologies, Inc. (Nasdaq: WAVE) today
announced that they have entered into definitivemerger agreements. The
combined organizations bolster Silicon Graphics' commitment to the
entertainment andcreative design markets, and allow the company to architect
the foundation necessary for software partners andcustomers to build the
digital studio of the 21st Century.
As a result of the mergers, Silicon Graphics will form a wholly owned,
independent software subsidiary that will focus on developing the world's most
advanced tools for the creation of digital content. Rob Burgess,
currentlypresident and CEO of Alias, will become president of the new company,
and Mike Noling, currently president andCEO of Wavefront, will report to
Burgess as vice president of operations. Martin Plaehn, currently
Wavefront'sexecutive vice president of corporate and product development, will
also report to Burgess to lead the technical team.
Under terms of the agreements, which were approved by the boards of directors
of the respective companies, Alias stockholders will receive the equivalent of
0.90 shares of Silicon Graphics' common stock for each share of Aliascommon
stock owned. Wavefront stockholders will receive 0.49 shares of Silicon
Graphics' common stock for eachshare of Wavefront common stock owned. The
closing prices for Silicon Graphics, Alias and Wavefront commonstock on Fr
iday, February 3, 1995, the last trading day prior to the board meetings to
approve the transaction, were$31.25, $20.875 and $12.625, respectively. The
shares to be issued by Silicon Graphics have a current market valueof
approximately $500 million.
Maybe if the survivors took a step back and said "Yeah being clever engineers is good and all, but what do our customers need?" Find something Wintel can't or isn't providing right now and figure out how to bring that to the market and a reasonable price.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
In my opinion, I fear that this isn't very good news for the people at Alias; however, it doesn't surprise me. When the product dropped in price, the marketing costs soared in an attempt to reach a larger market. Even last year, Alias must have flown 50% of their staff to SD for SIGGRAPH, and they still held, and sponsored, ridiculous parties, including a private party with 'Rocket From The Crypt' (damn good show). Has anyone seen the Alias office in downtown Toronto? Yes, stainless steel, custom glass, pool tables, and hundreds of fancy display devices cost a LOT of money. The senior leadership at Alias always acted like SGI was the plague.. eventually, your master will write you off when you don't show them any respect. You can read KKRs site to tell that they are not interested in Maya or Studio, they are interested in money. Plain and simple. All this is simply speculation of course......time will tell the real outcome of this development.
But you hit the nail on the head. I expected Apple to buy them as well...then kill the Windows port (as they love doing oh so much). It would have made a great addition to Shake, Logic, and Final Cut Pro.
That said, I predict that Apple will make another bid sometime down the road. Maybe Accel-KKR will take Steve's offer.
Also about this time SGI's ground breaking new system was the O2. It was really good at some niche video functions, including video textures. Unfortunately it had truly dismal memory bandwidth to the CPU, I guess they just forgot that this is one of the most basic building blocks of a computer with good performance. It was trailing just about everything on SPEC benchmarks before it even released(and it was late).
They sold a bunch of them to people who wanted cheap SGI's, like ILM. I speculate to this day that the O2 was a key contributor to ILM making so many bad movies during the era they relied on those steaming piles. They were just crushingly slow and I imagine any sucked the creativity out of any artist that had to use one, especially after they saw Maya running on a $2,000 PC or a Mac.
SGI does some really interesting niche technology but they have never had a CPU strategy that worked in any sustained way and they completely lost it in graphics when they kept trying to build multiboard graphics monstrosities while GLINT came out with the first graphics chip, followed by 3DFX, Nvidia and ATI. Carver Mead outlined a long time ago how to design electronics and that was to put everything on a CMOS chip. SGI didn't learn that lesson for some reason so all their graphics systems were big, bulky, somewhat unreliable and most importantly way to expensive to manufacture versus a mass produced GPU.
@de_machina
Not really by my count. Look at your current highend Macs, the G5's; these systems do not come with serious 3D cards, they come with mid-end gamer cards. Let me ask you, how are you supposed to do serious 3D animation work on a Radeon 9800 Pro? Have you ever tried? It isn't very productive.
If Mac is serious about the 3D market, (and it honestly hasn't demonstrated it is, atleast for professional level work), they will start offering highend cards to their customers, cards such as the Nvidia Quadro FX 1100. Until it offers such cards, they are merely talking out their ass about 3D and Macs.
"What can a thoughtful man hope for mankind on Earth, given the experience of the past million years? Nothing." -Bokonon
What crack are you smoking?
The O2 had EXCEPTIONAL effective memory bandwidth, somewhere on the order of 1GBps, with 2.1GBps thoeretical. That's why it's STILL good at doing DV processing. There isn't a consumer product available *today* that can compete in DV streaming, at *any* price. Yes, the CPU was shit (maybe not shit, but certianly over priced if you were doing CPU intensive stuff). No argument there. But the memory system was, and still is, quite exceptional. And it was quite a while before Maya (didn't even exist for PC until mid '98--TWO years, that's decades in the computer world).
The local TV affiliates are still using O2s for streaming their stations. I imagine they're moving on to either Octanes or bigger systems with the HDTV boards, since that's the direction things are moving, but that's the thing:
SGI always targeted niche markets, and they were unsurpassed by anyone in those markets, still are, in many cases. Oil companies and car/airplane manufactures still use their Origin line for visualzation of huge datasets... Because NOBODY else can do it. Somewhat unreliable my ass, this fellow likely has never even laid naked eye on/or worked on one of their big iron systems.
The niche market business plan combined with their pissing off their very talented engineers (which moved on mostly to Nvidia, who'da figured) is what is sending them to the grave.
-1 (DUH)
Yup, this is the KKR, the "Original Bad Boy" of the private equity world. Remember that book, Barbarians at the Gate, about the leveraged buyout of RJR Nabisco? KKR were the "barbarians."