FREMONT, CA -- Jabil Circuit has struck a deal to purchase SGI's Wisconsin manufacturing facility and certain other assets, plus staff, for approximately $6 million in cash. The companies further agreed to a "manage in place" deal under which Jabil will supply products and supply chain services to the computing OEM.

The deal is expected to close in February 2014.

Under terms of the agreement, Jabil will purchase SGI's primary manufacturing facility, located at 100 N. Cashman Dr. in Chippewa Falls, and approximately 130 of the site's manufacturing personnel in Chippewa Falls will transfer to the EMS company.

SGI expects to incur cash and non-cash charges of approximately $2 million in its second fiscal quarter ending Dec. 27, 2013.

In a statement, Jorge Titinger, president and CEO of SGI, said, "We expect significant benefits to SGI and our customers as a result of this relationship, including a more variable cost structure, greater flexibility to respond to changes in volumes or customer requirements, shorter cycle times for certain products, and enhanced quality management. As a world-class supply chain partner, Jabil has extensive experience in system-level assembly and testing of compute and storage products and is able to meet the unique sourcing and technical requirements of both our government and commercial customers. We are excited about the opportunities for growth, cost reduction, and enhanced customer satisfaction over time as we move forward with this manufacturing partnership."

James Luginbill, Jabil vice president, global business units, said, "We look forward to working with SGI to meet their supply chain needs. The capabilities of the SGI people joining the Jabil team will be instrumental in meeting SGI's ongoing needs and the needs of other potential high performance computing customers."

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