Deal priced at $125 per share
NVIDIA has agreed to buy Israeli networking hardware specialist Mellanox for $6.9 billion in an all-cash deal, it has confirmed.
The acquisition comes after Mellanox was earlier linked with a potential buyout by Microsoft, which is a major customer.
The $125/share acquisition is a substantial premium on a $5 billion offer widely reported to have been made by US chipmaker Xilinx.
NVIDIA Buys Mellanox, Leapfrogs Microsoft, Others for Acquisition
“We share the same vision for accelerated computing as NVIDIA,” said Eyal Waldman, founder and CEO of Mellanox in a release Monday
“Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people.”
The deal turbocharges NVIDIA’s growing push into the global data centre market, adding Mellanox interconnects to NVIDIA’s GPUs in a combined portfolio that already reaches the majority of hyperscale data centres.
NVIDIA said in a release Monday: “The acquisition will unite two of the world’s leading companies in high performance computing (HPC).”
“Together, NVIDIA’s computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker.”
The two companies both have components in the world’s two fastest supercomputers, Sierra and Summit, operated by the U.S. Department of Energy.
“The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s datacenters,” said Jensen Huang, founder and CEO of NVIDIA. “Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine.
Mellanox sells a wide range products from cables to its system-on-a-chip (SoC) family BlueField. The Israeli company has been under pressure to sell its business from activist hedge fund Starboard Value LLP, which owns a 10.5 percent interest in the company.
As well as Microsoft, Mellanox also provides products for Dell and HPE.