By Cromwell Schubarth  – TechFlash Editor, Silicon Valley Business JournalJun 11, 2018, 2:31pm PDT Updated Jun 11, 2018, 6:07pm EDT

Specialty memory technology provider Smart Global Holdings Inc. has agreed to acquire Fremont-based Penguin Computing Inc. for up to $85 million.

The deal combines two East Bay specialty computing companies that have been around for a long time.

Newark-based Smart Global is in its third iteration as a public company (NASDAQ:SGH) after raising about $58 million in an IPO that priced well below its target range a year ago at $11 a share. Its stock price has more than quadrupled since then, though, hitting as high as $56.69 in March.

News of the acquisition sent Smart Global’s stock up by nearly 5 percent on Monday to close at $43.31.

The company employs 1,200 people at its headquarters and at outposts in Brazil and Malaysia.

The business started out as Smart Modular Technologies in 1988 and went public for the first time in 1995. It was acquired by Solectron in 1999. It ran as a subsidiary of that company until it was sold to private equity investors in 2004. They took it public for the second time in 2006.

Silver Lake took the company private again in 2011 when it was known as Smart Worldwide and sold off a unit that made flash storage to SanDisk in 2013.

Penguin Computing, led by CEO Tom Coull, has been around since 1998 and raised about $54 million in venture funding and $33 million in debt financing in that time. PitchBook Data estimates that it was valued at about $28 million when it raised its last venture round in 2011.

Financials released by Smart Global show Penguin posted nearly $6 million in net income last year on $166.5 million in revenue.

Smart Global said Penguin would operate as a standalone operation in its new Smart Specialty Compute & Storage Solutions unit, which is targeting the artificial intelligence and machine learning markets.

“We are pleased to be embarking on the first acquisition of our strategy to broaden the reach and capabilities of Smart into new technologies, markets and channels that leverage our proven platform of integrating and growing businesses,” Smart Chairman and CEO Ajay Shah said in the announcement of the acquisition. “Penguin brings an outstanding customer base, solid products and strong supplier relationships to Smart in the specialty compute, storage and networking markets.”