Dot Hill Systems Corp. (NASDAQ: HILL) shares hit a multiyear high, dating back to the early 2000s, on news that it will be acquired. Seagate Technology PLC (NASDAQ: STX) will be making the acquisition. The transaction is expected to close during the fourth quarter of 2015.

Both companies announced Tuesday after the markets closed that they entered into a definitive agreement under which a wholly owned indirect subsidiary of Seagate will commence a tender offer for all the outstanding shares of Dot Hill in an all-cash transaction valued at $9.75 per share. The consideration represents a 50% premium over the preceding three-month stock price average.

The total transaction is valued at roughly $694 million, and it is worth noting that Dot Hill has $49 million in cash on its balance sheet.

The transaction was unanimously approved by Dot Hill’s board of directors and the consummation of the tender offer is subject to customary closing conditions, including a minimum tender of a majority of outstanding Dot Hill shares. This deal is also subject to regulatory approval.

Phil Brace, President of Cloud Systems and Electronics Solutions at Seagate, commented on the acquisition:

Dot Hill’s innovative storage systems and IP portfolio are a strategic addition to our storage technology portfolio, enabling us to accelerate the growth of Seagate’s OEM-focused cloud storage system and solutions business. We are focused on providing the highest quality storage systems for our OEM customers and Dot Hill’s storage solutions will enable us to advance our strategic efforts. We look forward to welcoming Dot Hill’s strong team, which has proven experience in developing and delivering best-in-class storage solutions that are trusted by the world’s leading IT manufacturers and their channel partners, and we expect the transaction to be accretive to non-GAAP earnings in fiscal 2016.

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Shares of Dot Hill were up 87% at $9.69 Wednesday morning. The stock has a consensus analyst price target of $8.50 and a 52-week trading range of $3.14 to $9.70.

Seagate shares were down 3.1% at $50.40, in its 52-week range of $44.46 to $69.40. The consensus analyst price target is $57.47.

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