NVIDIA to Acquire Mellanox for $6.9 Billion

  • Unites lea짯ders in pro짯ces짯sing and inter짯con짯nect for the high per짯for짯mance com짯pu짯ting market
  • Builds on the com짯pa짯nies long histo짯ry of col짯la짯bo짯ra짯ti짯on and joint innovation
  • Expec짯ted to be accre짯ti짯ve to NVIDIA셲 non-GAAP gross mar짯gin, non-GAAP EPS and free cash flow imme짯dia짯te짯ly after close

SANTA CLARA, Calif., and YOKNEAM, Isra짯el, March 11, 2019 NVIDIA and Mel짯lan짯ox today announ짯ced that the com짯pa짯nies have rea짯ched a defi짯ni짯ti짯ve agree짯ment under which NVIDIA will acqui짯re Mel짯lan짯ox. Pur짯su짯ant to the agree짯ment, NVIDIA will acqui짯re all of the issued and out짯stan짯ding com짯mon shares of Mel짯lan짯ox for $125 per share in cash, repre짯sen짯ting a total enter짯pri짯se value of appro짯xi짯m짯ate짯ly $6.9 bil짯li짯on. Once com짯ple짯te, the com짯bi짯na짯ti짯on is expec짯ted to be imme짯dia짯te짯ly accre짯ti짯ve to NVIDIA셲 non-GAAP gross mar짯gin, non-GAAP ear짯nings per share and free cash flow.

The acqui짯si짯ti짯on will unite two of the world셲 lea짯ding com짯pa짯nies in high per짯for짯mance com짯pu짯ting (HPC). Tog짯e짯ther, NVIDIA셲 com짯pu짯ting plat짯form and Mellanox셲 inter짯con짯nects power over 250 of the world셲 TOP500 super짯com짯pu짯ters and have as cus짯to짯mers every major cloud ser짯vice pro짯vi짯der and com짯pu짯ter maker.

The data and com짯pu짯te inten짯si짯ty of modern workloads in AI, sci짯en짯ti짯fic com짯pu짯ting and data ana짯ly짯tics is gro짯wing expo짯nen짯ti짯al짯ly and has put enorm짯ous per짯for짯mance demands on hypers짯ca짯le and enter짯pri짯se dat짯a짯cen짯ters. While com짯pu짯ting demand is sur짯ging, CPU per짯for짯mance advan짯ces are slo짯wing as Moore셲 law has ended. This has led to the adop짯ti짯on of acce짯le짯ra짯ted com짯pu짯ting with NVIDIA GPUs and Mellanox셲 intel짯li짯gent net짯wor짯king solutions.

Dat짯a짯cen짯ters in the future will be archi짯tec짯ted as giant com짯pu짯te engi짯nes with tens of thou짯sands of com짯pu짯te nodes, desi짯gned holi짯sti짯cal짯ly with their inter짯con짯nects for opti짯mal performance. 

An ear짯ly inno짯va짯tor in high-per짯for짯mance inter짯con짯nect tech짯no짯lo짯gy, Mel짯lan짯ox pio짯nee짯red the Infi짯ni짯Band inter짯con짯nect tech짯no짯lo짯gy, which along with its high-speed Ether짯net pro짯ducts is now used in over half of the world셲 fas짯test super짯com짯pu짯ters and in many lea짯ding hypers짯ca짯le datacenters.

With Mel짯lan짯ox, NVIDIA will opti짯mi짯ze dat짯a짯cen짯ter-sca짯le workloads across the enti짯re com짯pu짯ting, net짯wor짯king and sto짯rage stack to achie짯ve hig짯her per짯for짯mance, grea짯ter uti짯liza짯ti짯on and lower ope짯ra짯ting cost for customers.

The emer짯gence of AI and data sci짯ence, as well as bil짯li짯ons of simul짯ta짯neous com짯pu짯ter users, is fue짯ling sky짯ro짯cke짯ting demand on the world셲 dat짯a짯cen짯ters, said Jen짯sen Huang, foun짯der and CEO of NVIDIA. 쏛ddres짯sing this demand will requi짯re holi짯stic archi짯tec짯tures that con짯nect vast num짯bers of fast com짯pu짯ting nodes over intel짯li짯gent net짯wor짯king fabrics to form a giant dat짯a짯cen짯ter-sca짯le com짯pu짯te engine.

We셱e exci짯ted to unite NVIDIA셲 acce짯le짯ra짯ted com짯pu짯ting plat짯form with Mellanox셲 world-renow짯ned acce짯le짯ra짯ted net짯wor짯king plat짯form under one roof to crea짯te next-gene짯ra짯ti짯on dat짯a짯cen짯ter-sca짯le com짯pu짯ting solu짯ti짯ons. I am par짯ti짯cu짯lar짯ly thril짯led to work clo짯se짯ly with the visio짯na짯ry lea짯ders of Mel짯lan짯ox and their ama짯zing peo짯p짯le to invent the com짯pu짯ters of tomorrow.

We share the same visi짯on for acce짯le짯ra짯ted com짯pu짯ting as NVIDIA, said Eyal Wald짯man, foun짯der and CEO of Mel짯lan짯ox. 쏞om짯bi짯ning our two com짯pa짯nies comes as a natu짯ral exten짯si짯on of our long짯stan짯ding part짯ner짯ship and is a gre짯at fit given our com짯mon per짯for짯mance-dri짯ven cul짯tures. This com짯bi짯na짯ti짯on will fos짯ter the crea짯ti짯on of powerful tech짯no짯lo짯gy and fan짯ta짯stic oppor짯tu짯ni짯ties for our people.

The com짯pa짯nies have a long histo짯ry of col짯la짯bo짯ra짯ti짯on and joint inno짯va짯ti짯on, reflec짯ted in their recent con짯tri짯bu짯ti짯ons in buil짯ding the world셲 two fas짯test super짯com짯pu짯ters, Sier짯ra and Sum짯mit, ope짯ra짯ted by the U.S. Depart짯ment of Ener짯gy. Many of the world셲 top cloud ser짯vice pro짯vi짯ders also use both NVIDIA GPUs and Mel짯lan짯ox inter짯con짯nects. NVIDIA and Mel짯lan짯ox share a com짯mon per짯for짯mance-cen짯tric cul짯tu짯re that will enable seam짯less integration.

Once the com짯bi짯na짯ti짯on is com짯ple짯te, NVIDIA intends to con짯ti짯nue inves짯t짯ing in local excel짯lence and talent in Isra짯el, one of the world셲 most important tech짯no짯lo짯gy cen짯ters. Cus짯to짯mer sales and sup짯port will not chan짯ge as a result of this transaction.

Addi짯tio짯nal Tran짯sac짯tion Details

Post clo짯se, the tran짯sac짯tion is expec짯ted to be imme짯dia짯te짯ly accre짯ti짯ve to NVIDIA셲 non-GAAP gross mar짯gin, non-GAAP ear짯nings per share and free cash flow. NVIDIA intends to fund the acqui짯si짯ti짯on through cash on its balan짯ce sheet. In addi짯ti짯on, the짯re is no chan짯ge to its pre짯vious짯ly announ짯ced capi짯tal return pro짯gram for the rest of fis짯cal 2020. The tran짯sac짯tion has been appro짯ved by both com짯pa짯nies boards of direc짯tors and is expec짯ted to clo짯se by the end of calen짯dar year 2019, sub짯ject to regu짯la짯to짯ry appr짯ovals as well as other cus짯to짯ma짯ry clo짯sing con짯di짯ti짯ons, inclu짯ding the appr짯oval by Mel짯lan짯ox share짯hol짯ders of the mer짯ger agreement.

Advi짯sors

Gold짯man Sachs & Co. LLC ser짯ved as exclu짯si짯ve finan짯cial advi짯sor to NVIDIA and Jones Day ser짯ved as legal advi짯sor. Cre짯dit Suis짯se Group and J.P. Mor짯gan Cha짯se & Co. ser짯ved as finan짯cial advi짯sors to Mel짯lan짯ox and Lat짯ham & Wat짯kins, LLP and Her짯zog Fox & Nee짯man ser짯ved as legal advisors.

Con짯fe짯rence Call and Web짯cast Details

NVIDIA will con짯duct a web짯cast at 5:30 a.m. PT today to dis짯cuss the tran짯sac짯tion. The web짯cast and a copy of the pre짯sen짯ta짯ti짯on mate짯ri짯als can be found on NVIDIA셲 Inves짯tor Rela짯ti짯ons web짯site at investor.nvidia.com. A web짯cast replay and a copy of the web짯cast pre짯sen짯ta짯ti짯on mate짯ri짯als will also be available at investor.nvidia.com.

About Mel짯lan짯ox
Mel짯lan짯ox (NASDAQ: MLNX) is a lea짯ding sup짯pli짯er of end-to-end Ether짯net and Infi짯ni짯Band smart inter짯con짯nect solu짯ti짯ons and ser짯vices for ser짯vers and sto짯rage. Mel짯lan짯ox inter짯con짯nect solu짯ti짯ons increase dat짯a짯cen짯ter effi짯ci짯en짯cy by pro짯vi짯ding the hig짯hest through짯put and lowest laten짯cy, deli짯ve짯ring data fas짯ter to appli짯ca짯ti짯ons and unlo짯cking sys짯tem per짯for짯mance capa짯bi짯li짯ty. Mel짯lan짯ox offers a choice of fast inter짯con짯nect pro짯ducts: adap짯ters, swit짯ches, soft짯ware and sili짯con that acce짯le짯ra짯te appli짯ca짯ti짯on run짯time and maxi짯mi짯ze busi짯ness results for a wide ran짯ge of mar짯kets inclu짯ding high per짯for짯mance com짯pu짯ting, enter짯pri짯se dat짯a짯cen짯ters, Web 2.0, cloud, sto짯rage and finan짯cial ser짯vices. More infor짯ma짯ti짯on is available at http://www.mellanox.com/.