SGH to buy computing solutions provider Stratus Technologies

• According to terms of the deal, SGH will pay $225 million in cash at closing and an earn-out payment of up to $50 million
• The deal is expected to occur in the second half of 2022
• Moelis & Company LLC is acting as financial advisor to SGH on the transaction

SGH has agreed to acquire Stratus Technologies, a provider of data center and Edge computing solutions. The seller is Siris Capital Group.

According to terms of the deal, SGH will pay $225 million in cash at closing and an earn-out payment of up to $50 million. The latter is based on the gross profit performance of the Stratus business during the first full 12 fiscal months of Stratus following the closing.

“This transaction builds upon our successful track record of M&A at SGH,” said Mark Adams, CEO of SGH, in a statement. “The high-availability and fault-tolerant capabilities of Stratus will expand our IPS offerings in Edge, Core, and Cloud, and will enable us to more comprehensively address our combined customers’ needs. We look forward to welcoming the Stratus team to SGH.”

The deal is expected to occur in the second half of 2022.

Moelis & Company LLC is acting as financial advisor to SGH while Latham & Watkins LLP is acting as legal advisor. Sidley represents Siris Capital on the sale.

Siris invests primarily in mature technology and telecommunications companies. The private equity firm is based in New York, Silicon Valley and West Palm Beach, and has raised nearly $6 billion in cumulative capital commitments.