The sum is meager amount for a company that one was selling massive computing systems for millions of dollars, but now filed for federal bankruptcy protection and lists total debt of $526.5 million. 

 

With this acquisition, Rackable Systems will add to its product line the servers and software developed by Silicon Graphics. The deal will also enhance Rackable's service operations for the commercial, government, and scientific sectors.

 

The acquisition will enable Rackable to soon turn into a bigger player in HPC and visualization segments, said the company’s president and Chief Executive Officer Mark Barrenechea. However, many experts said the real winners of this deal are the Silicon Graphics customers, who will most likely continue to have some level of support for their systems. 

 

The transaction is expected to be finalized within 60 days. The news of the deal caused the Silicon Graphics to plunge 81 percent, while Rackable Systems fell 11 percent. 

 

Silicon Graphics said it will pay off the secured creditors with the net proceeds from the transaction, the company said in a filling with the Securities and Exchange Commission. 

 

"While details of the transaction remain unclear, we view the acquisition as a long-term positive for Rackable Systems shares," analyst Doug Reid of Thomas Weisel Partners wrote in a note to clients, Reuters reported.