Mellanox Technologies, Ltd. (MLNX) said today that it will acquire Voltaire Ltd. (VOLT) that will combine several specialists in high-speed networking. Mellanox will pay $8.75 per share, or about $218 million. That’s a significant premium for owners of Voltaire shares, which were trading at $6.43 a share prior to the Thanksgiving holiday.
What’s the deal’s significance. Here’s a roundup of commentary and analysis from around the web:
- The Register – Mellanox is a player in InfiniBand switching for servers and storage and makes its own chips to support the protocol, which Voltaire uses in its switches. Mellanox has a large share of high-end InfiniBand and Ethernet networking adapter card racket, and seems to be buying Voltaire to jumpstart its entry into 10 Gigabit Ethernet and future 40 GE and 100 GE products and to peddle gateways that bridge InfiniBand and Ethernet networks. The move also gives Mellanox a chance to grab a bigger piece of the InfiniBand space to gird its loins for a battle with QLogic, which makes its own InfiniBand and Fibre Channel silicon and switches.
- PCWorld – The deal will give Mellanox more scale as well as penetration into verticals such as financial services and energy, executives said during a conference call. Both companies are best known for their Infiniband interconnect technologies, but also sell Ethernet-based products. Both vendors primarily make their money from systems vendors that embed the technology in their own products, said Forrester Research analyst Andrew Reichman. Mellanox is no doubt eager to gain from Voltaire’s partnerships with the likes of Hewlett-Packard, he said.
- DailyFinance – Despite its strong technology, the stock price of Voltaire has been erratic. Then again, the company has rivals like QLogic (QLGC), Cisco (CSCO), Juniper Networks (JNPR) and Brocade Communications Systems (BRCD). A merger with Mellanox should give it more heft. The deal will also help with Mellanox’s vision to be a leading supplier of end-to-end connectivity solutions for servers and storage.