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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."
"SGI on Thursday announced it has agreed to sell its Alias subsidiary for $57.5 in cash to Accel-KKR."
I'll pay $58!!
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
They will probably sell a lot more of the non essential business units as they have done with Cray and Alias Wavefront. They have even resorted to the ever so sleazy practice of exporting jobs to India.
It is said a fox will knaw off its own leg to escape from a trap. We can see the same is true of two bit companies with outdated technology.
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.
Answers and more...
IANAL but sometimes I wish I was.
To have a right to do a thing is not at all the same as to be right in doing it
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.
Is this a futile attempt at selling off the family silver in an effort to keep their failing business solvent or is it some shrewd move to raise cash for more profitable enterprises?
Is SGI a lost cause or is there life in it yet?
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 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.
I mean, I could see a FX company buying it...but an investment firm that handles grocery technology and coal services?
I'm sorry, but it brings to mind that back in the 70's when AMF bought Harley-Davidson...and look at THAT fiasco.
"Music is everybody's possession. It's only publishers who think that people own it." - John Lennon.
I had almost expected Apple to buy the rights to Alias. The Mac OS X version rocks, and they've got billions in the bank, $50m would have been pocket change. It could have complemented Shake and Logic, bring 3D into their professional tools. And then we could have looked forward to iModel, or whatever, as the low end consumer version.
Ah well, wasn't to be.
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.
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.
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?
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.
That that was the price of a single seat license for Wavefront.
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.
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
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.
In the great CONS chain of life, you can either be the CAR or be in the CDR.
That amount of cash would have been peanuts for Apple and Apple would finally have something in the 3D segment of the market.