Storage systems maker Seagate Technology PLC has swooped to acquire Dot Hill Systems Corp. a maker of scalable SAN systems and virtualization software, in a $694 million all-cash deal.

Dot Hill Systems should prove to be a useful addition to Seagate’s portfolio, what with the myriad of enterprise grade storage arrays, software and data protection services it offers.

Seagate said in its announcement it’s paying $694 million, which equates to about $9.75 per share for Dot Hill. According to The Register, that represents a fifty percent premium on Dot Hill’s preceding three month stock price average.

In prepared remarks, Seagate’s president of cloud systems and electronic solutions Phil Brace said the plan was to use Dot Hill’s IP and external storage array-based systems to further its OEM-focused cloud storage systems and solutions business.

For Dot Hill, the deal certainly makes sense when one considers the company’s struggles in recent years. As The Register points out, its profits have been a bit meagre in recent years, mainly due to skyrocketing administrative expenses. Once it’s absorbed into Seagate’s greater empire, it’s likely the bigger firm will be able to cut back on those admin costs and help bump Dot Hill’s annual revenues, which currently average around $240 million a year.

As for Seagate, it’ll gain new sales channels via Dot Hill for its flash and disk storage products, and it should also provide it with means to fend off the challenge from rivals like EMC Corp. in the cloud.

Seagate employed the services of Perella Weinberg Partners as financial advisor, and Wilson Sonsini Goodrich & Rosati as its legal advisors for the deal. Meanwhile, Morgan Stanley and Needham & Company advised Dot Hill on the deal.

Seagate said the transaction should conclude by Q4 of 2015.

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