Mellanox is expanding its intelligent end-to-end interconnect solutions with the acquisition of EZchip. The two companies entered into a definitive merger agreement whereby Mellanox will acquire 100% of the outstanding ordinary shares of EZchip for a cash purchase price of $25.50/share—a transaction value of approximately $811 million. The Boards of both companies unanimously approved the transaction.
Mellanox, with the purchase, extends its strategy to supply intelligent interconnect solutions for software-defined data centers. The addition of EZchip’s expands the company’s ability 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 combined company will have diverse and robust solutions to enable customers to meet the growing demands of data-intensive applications used in high-performance computing, Web 2.0, cloud, secure data center, enterprise, telecom, database, financial services and storage environments.
Mellanox intends to retain both companies’ existing product lines, and states that it will ensure continuity for customers and partners of both companies. The combined businesses have approximately 2,400 employees and revenues of $668 million for the 12 months that ended in June 30, 2015.
The transaction is projected to close in the first quarter of 2016 and Mellanox expects the transaction to be non-GAAP accretive from day one. It will fund the transaction with cash on hand from the combined companies and $300 million in fully committed debt financing.
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