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Hewlett Packard Enterprises (HPE) is acquiring Cray, a supercomputer manufacturer, for $35 per share. The value of the transaction is $1.3 billion in cash.

Cray is a primary provider of high-end supercomputing solutions to customers with the most challenging, data-intensive workloads for making critical decisions. It holds a leadership position in the top 100 supercomputer installations around the world.

Its supercomputing systems are capable of handling massive data sets, converged modeling, simulation, AI, and analytics workloads.

The $35 per share acquisition price is 17.4 percent higher than the $29.81 previous closing price of Cray shares. On Frida y, the stock price of Cray surged more than 22 percent to $35.52 per share following the announcement of the transaction.

Combined company will have better opportunities for growth

According to HPE, Cray will accelerate and expand its high performance computing (HPC) portfolio. Its plan is to leverage Cray’s foundational technologies and add complementary solutions.

The combined company will reach a wider set of markets and will be offering deep expertise to solve the most complex problems of customers. Together, the companies will have better opportunities for growth and to lead the Exascale era of high performance computing.

Additionally, HPE said the acquisition will drive significant revenue growth opportunities and deliver cost synergies through efficiencies. It will also lower cost and product performance by leveraging Cray’s proprietary technology.

HPE and Cray will lead the next generation of high performance computing

In a statement, HPE President and CEO Antonio Neri, said, Cray is a global technology leader in supercomputing and shares our deep commitment to innovation. By combining our world-class teams and technology, we will have the opportunity to drive the next generation of high performance computing and play an important part in advancing the way people live and work.”

On the other hand, Cray President and CEO Peter Ungaro, commented, “This is an amazing opportunity to bring together Cray’s leading-edge technology and HPE’s wide reach and deep product portfolio, providing customers of all sizes with integrated solutions and unique supercomputing technology to address the full spectrum of their data-intensive needs.”

In addition, Ungaro said the transaction “maximizes value” and will create opportunities for their customers and employees.

The deal is expected to close by the first quarter of HPE’s fiscal year 2020. It is subject to regulatory approvals and other customary closing conditions.