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Home / Business / American gaming company Nvidia to buy Israeli chip maker Mellanox for $ 6.9 billion

American gaming company Nvidia to buy Israeli chip maker Mellanox for $ 6.9 billion



American gaming and computer graphics giant Nvidia Corp will acquire the Israeli chip maker Mellanox Technologies Ltd. for $ 6.9 billion, the Israeli firm said in a statement Monday. The move will help the US firm increase the flow of information to and from data centers and increase profits and cash flow.

As part of the deal, the US firm will acquire the company for $ 125 per share in cash, the statement said, representing a 14 percent premium to the market value of the shares. Mellanox shares closed at $ 109.38 on Friday, giving the Israeli firm a $ 5.9 billion valuation.

The shares, traded on Nasdaq since 2007, have developed 51

% over the past twelve months, including increasing demand for company products and reporting that the Israeli firm was claimed by buyers, including Intel Corp.. and Microsoft.

Mellanox, headquartered in Yokne & # 39; am, Israel, and Sunnyvale, California, is a manufacturer of high-speed servers and storage solutions. The products developed by the company, a pioneer in InfiniBand and Ethernet technologies, are used in supercomputers globally.

Nvidia's founder and CEO Jensen Huang speaks at the company's GTC developers conference in Tel Aviv October 18, 2017 (Courtesy) [19659008] "The emergence of AI and computer science, as well as the use of billions of computers at the same time burning the demand of data centers globally," said Nvidia's founder and CEO Jensen Huang in the statement. "Compliance with these requirements requires holistic architectures that connect a large number of high-speed data needs in smart networks to create a giant data center engine."

The agreement is the second largest technological agreement in Israel and the third largest acquisition of an Israeli firm, according to data prepared by the IVC Research Center, which traces the Israeli technology industry.

In 2017, Intel acquired Mobileye for the entire $ 15.3 billion, making it the largest ever in Israel, as well as the country's largest tech deal. In May 2018, International Flavors & Fragrances bought Israeli flavoring maker Frutarom for $ 7.1 billion. Frutarom, however, is not considered a technical company.

"We share the same vision for accelerated computing as Nvidia," said Mellemox founder and CEO Eyal Waldman in the statement. "The combination of our two companies comes as a natural extension of our long-standing partnership."

The merger of forces "will promote the creation of powerful technology and good opportunities," he said.

The two companies have previously collaborated on joint projects.

The sale of Mellanox "is central to the development of high-tech industry in Israel, showing that semiconductors are still central to Israeli high technology," said Zeev Holtzman, chairman and founder of the IVC Research Center in a text message. "The transformation of Mellanox into a leading The division of a leading global technology company will allow continued expansion of Nvidia's presence in Israel under Israeli leadership led by Waldman. The output is a significant contribution to the economy, employment and the high-tech sector. "

With the implementation of the agreement, Nvidia intends to continue investing in local excellence and talent in Israel," which is one of the most important technology centers in the world, the statement said.

Nvidia intends to fund the purchase through its existing cash, the statement said. The transaction has been approved by the Board of Directors of the two companies, and is expected to be closed by the end of 2019, subject to approval of approval and approval of shares in Mellanox.

  Mellanox headquarters in Yokne (photo credit: Moshe Shai / Flash90)

Mellanox headquarters in Yokne (Moshe Shai / Flash90)

In January, Mellanox reported record earnings, as in 2018 crossed the $ 1 billion mark for the first time as clients demanded higher speeds for their ski platforms, AI calculations, and data centers. The company has 2000 workers in Israel and another 1000 in the US and elsewhere.

Nvidia has been active in Israel for the past nine years, both selling their processors locally and buying startup bets and creating a R&D unit. As of August 2018, the company had invested some "tens of millions of dollars" in three startups: Zebra Medical, a medical image content software producer using artificial intelligence; Deep Instinct, which uses deep learning to predict cyber threats; and Rocketick, a simulation and chip testing company that was then purchased by Cadence in 2016 for a reported $ 40 million.

Nvidia has a R&D center in Israel that employs about 20-30 workers, and in October it said it was planned to establish another research center in Israel that will focus on artificial intelligence.

In November 2017, New York activist Investor Starboard Value LP acquired a 10.7% stake in Mellanox, and encouraged to improve performance and explore potential sales. 19659023] window.fbAsyncInit = function () {
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