Seagate buying Xyratex in $374 million deal

Hard disk drive maker Seagate Technology said Monday that it will buy data storage company Xyratex for about $374 million to expand its storage business and improve its supply chain.

The $13.25-per-share offer is a 27 percent premium to Xyratex's Friday closing price of $10.45 per share. Xyratex stock surged $2.81, or 27 percent, to $13.26 in midday trading, its highest point in more than a year. Shares of Seagate rose 12 cents to $55.78.

Xyratex Ltd. provides data storage and equipment for companies. Seagate said Xyratex's enterprise storage systems and its high-performance computing business will be added to its storage business. It said Xyratex's test equipment business will strengthen its supply and manufacturing chain and give it access to important capital equipment.

Cupertino, Calif.-based Seagate reported $14.35 billion in revenue in its latest fiscal year, which ended June 28. Xyratex had $1.16 billion in revenue in its latest reported fiscal year, which ran through November 2012, but analysts polled by FactSet expect that the U.K. company's sales dropped to about $840 million for the fiscal year that ended in November.