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SGI is Shedding its Alias

Silicon Graphics (SGI) on Wednesday said it is considering selling Alias -- its 3D graphics technology and services division as part of a corporate restructuring.

The Mountain View, Calif., firm said it is involved in exclusive discussions with an unnamed private equity investment firm for the acquisition. Financial terms of the deal were not disclosed.

As a subsidiary of SGI, Toronto-based Alias services the film, video, games, web, interactive media, automotive, industrial design, education and visualization markets.

In a statement, Alias president Doug Walker said there would be no changes to the management team, organization, services, support or product availability as a result of the negotiations or the sale of the business.

"As an independent entity, Alias would be able to further expand its business, extend customer value and create significant growth with its products and services," Walker said. "The investor believes that there is a great potential and synergy to having design- and entertainment-focused products, services and customers."

Selling Alias would help SGI redouble its efforts on new high-performance computing, storage and visualization products.

The company recently cut 600 positions in August, after eliminating 400 employees back in May. The company said the restructuring is necessary to stay in the server and workstation hunt. Increased competition from IBM , Dell , Hewlett-Packard , and Sun Microsystems have all whittled away SGI's market share.

Moving forward, SGI said it's decided to concentrate more of its research and development on products based on the Linux operating system through its development partnership with SUSE LINUX and Intel's Itanium 2 processors for general purpose technical computing.

The rest of the way, SGI says its future efforts involving MIPS microprocessors and its IRIX operating system will focus on customers looking for custom-built systems.

While losing Alias may be helping SGI get its finances in order, the sale also cuts into SGI's client roster. Alias' design customers include AT&T, BMW, Boeing, Fiat, Ford, General Motors, Honda, Italdesign, Kodak, Kwikset, Mattel, Price Pfister, Renault, Rollerblade, Sharp, Trek Bicycle, Teague and Timex.

In its last financial quarterly report filed in December, Alias' revenues hit $18.4 million. During the same period, SGI reported $237.9 million in revenue.



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