Mellanox to acquire EZchip for $811 Million

1 October, 2015

The acquisition will help Mellanox to deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for data center and edge platforms

The acquisition will help Mellanox to deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for data center and edge platforms

Future giant: Eyal Waldman (right) and Eli Fruchter
Future giant: Eyal Waldman (right) and Eli Fruchter

In a major step to expand its market reach, Mellanox Technologies from Yokneam, Israel, has entered into a definitive merger agreement with EZchip: Mellanox shall acquire 100 percent of EZchip’s outstanding ordinary shares for a cash purchase price of $25.5 per share implying a transaction value of approximately $811 million (approximately $620 million net of cash).

The acquisition is a step in Mellanox’s strategy to become the leading broad-line supplier of intelligent interconnect solutions for the software-defined data centers. EZchip’s products and expertise in security, deep packet inspection, video, and storage processing will help Mellanox to deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for data center and edge platforms.

Holding layers 1-7 of the communications model

“Mellanox’s interconnect provides the fastest and most-scalable solution for moving data within the data center, allowing the continuous development, use and expansion of these applications,” said Eyal Waldman, president and CEO of Mellanox Technologies. “EZchip’s processing solutions allow users to process and analyze, at wire speed, data both within and outside the data center. We expect that the acquisition of EZchip’s technologies and team will better position us at 100Gb/s and beyond. We are looking forward to work together to build a successful company.

“Mellanox’s IS leading layer 1-3 connectivity solutions for data centers and EZchip’s is a leading layer 3–7 processing solutions for carrier networks. The two companies complement each other in technology, products, markets served and customers. Together, we enable a multitude of layer 1 through 7 solutions for data centers and carriers,” said Eli Fruchter, CEO of EZchip”.

EZchip is a fabless semiconductor company that provides high-performance network processors. Mellanox is a leading supplier of InfiniBand and Ethernet interconnect solutions for servers and storage. Mellanox plans to combine employees from both organizations. The combined businesses currently have approximately 2,400 employees, and have generated combined revenues of $668 million for the twelve months ended June 30, 2015.

The transaction is projected to close in the first quarter of 2016, subject to the completion of certain closing conditions. Mellanox intends to fund the transaction with cash on hand from the combined companies and $300 million in fully-committed debt financing. The proposed acquisition is subject to customary closing conditions, including the receipt of applicable regulatory approvals and the approval of EZchip’s shareholders.

Share via Whatsapp

Posted in: Business , Featured Stories , News , Semiconductors , Telecom and Communication

Other articles you might like

Aviat is trying a Hostile Takeover of Ceragon

Jon Medved: "After the War, We'll See a Sharp Rise in Investments"

Wi-Fi 6 plus Bluetooth LE 5.4 Wireless SoC