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Press Release
RACKABLE
SYSTEMS, INC. ANNOUNCES AGREEMENT TO ACQUIRE TERRASCALE TECHNOLOGIES,
INC.
-- Leading Server and Storage Provider Enters
Into an Agreement That Will Extend Storage Offerings with Clustered
File System Solution --
MILPITAS, Calif., August 29, 2006 – Rackable
Systems, Inc. (NASDAQ: RACK), a leading provider of servers and storage
products for large-scale data center deployments, today announced that
it has signed a definitive agreement to acquire Terrascale Technologies,
Inc., a provider of a clustered file system solution enabling high
performance I/O connectivity between servers and commodity-based storage
subsystems.
Terrascale’s clustered storage systems eliminate the performance
bottleneck inherent with legacy Network Attached Storage (NAS) architectures
by delivering a single file system solution that scales nearly linearly
in both capacity and performance. Terrascale’s technology
is well suited to large Linux clusters found in Internet and High Performance
Computing (HPC) environments, enabling customers to realize improved
manageability, storage utilization and availability in addition to
up to tens of gigabytes per second of I/O throughput.
“As the demand for high capacity, open architecture storage
systems continues to grow, Terrascale’s technology provides a
very compelling alternative to expensive solutions from legacy storage
vendors,” said Tom Barton, CEO of Rackable Systems. “This
solution will significantly boost the scalability and manageability
of our storage offerings, including our high capacity storage servers.”
Under the terms of the definitive agreement, Rackable Systems will
acquire privately-held Terrascale Technologies in an all-cash transaction
for a purchase price of $38 million. Rackable Systems also has
the option to retain the rights to a technology known as Distributed
Parity Engine (DPE) by paying an additional $9 million of cash consideration
to the stockholders of Terrascale, and the company will be conducting
further due diligence to research the applicability of this technology.
Thomas Weisel Partners LLC acted as exclusive financial advisor to
Rackable Systems in this transaction.
Conference Call Information
Rackable Systems will discuss the acquisition in a conference call
at 2:00 p.m. PDT, 5:00 p.m. EDT, today. To participate in the call,
investors should dial 800-289-0496 or 913-981-5519. A live web cast
of the call will also be available on the Investor Relations section
of the company's website at www.rackable.com. For
investors unable to participate in the live conference call, an audio
replay will be available on August 29, 2006 at approximately 4:30 p.m.
PDT and will remain available until September 1, 2006 at 9:00 p.m.
PDT. To access the audio replay, dial 888-203-1112 or 719-457-0820
and enter confirmation code 7551748. A web cast replay of the
call will be available on the Investor Relations section at www.rackable.com approximately
two hours after the conclusion of the call and will remain available
until September 30, 2006.
About Rackable Systems
Rackable Systems, Inc. is a provider of servers and storage products
for large-scale data center deployments. The company's servers are
designed to provide benefits in the areas of density, thermal efficiency,
serviceability, power distribution and remote management. Founded in
1999 and based in Milpitas, California, Rackable Systems serves Internet,
semiconductor design, enterprise software, federal government, entertainment,
financial services, oil and gas exploration and biotechnology customers
worldwide.
About Terrascale Technologies
Terrascale Technologies is a leading developer of next-generation
storage solutions for high performance enterprise class cluster and
grid applications. The TerraGrid Suite, featuring the TerraGrid
software architecture and the high performance Storage Brick and Storage
Block appliances, delivers industry leading networked storage throughput. Founded
in 2002, Terrascale Technologies is headquartered in Montreal, Canada
with field offices in McLean, VA and Albuquerque, NM. Additionally,
Terrascale has strategic partnerships in the UK and Germany.
Cautionary Statement
The statements in this news release regarding the perceived benefits
of Rackable Systems acquiring Terrascale Technologies are forward-looking
statements within the meaning of the Federal securities laws, and involve
a number of risks and uncertainties. Risks and uncertainties
include, but are not limited to: the closing of the acquisition
is subject to various closing conditions, and if these conditions are
not met or waived then the acquisition will not close; the difficulty
in integrating two companies, which may delay or prevent the materialization
of the benefits Rackable Systems expects from the acquisition; and
the ability of Rackable Systems to integrate the Terrascale technology
successfully into its products.
Contact Information:
Copyright© 2006 Rackable Systems, Inc. All rights
reserved. Rackable Systems is a registered trademark of Rackable Systems,
Inc. in the U.S. Rackable Systems and its logo are trademarks in the
U.S. and certain other countries. All other brands, names or trademarks
mentioned may be trademarks of their respective owners.
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