Mellanox Technologies Ltd. Announces Definitive Agreement to Acquire Voltaire Ltd. for Cash
Combines highly complementary products, markets and customers
Offers enhanced scale, system product knowledge and software
Expects $0.02 - $0.05 or more accretive non-GAAP EPS impact in fiscal
2011 and estimated annual cost synergies of at least $10 million by
the end of 2012
SUNNYVALE, Calif. & YOKNEAM, Israel--(BUSINESS WIRE)--
Mellanox® Technologies, Ltd. (NASDAQ:MLNX) (TASE:MLNX), a leading
supplier of end-to-end connectivity solutions for servers and storage
systems, and Voltaire Ltd. (NASDAQ:VOLT), a leading provider of
scale-out data center fabrics, announced today that they have signed a
definitive agreement under which Mellanox will acquire 100 percent of
Voltaire's outstanding ordinary shares for cash at a price of $8.75 per
share, or a total equity value of approximately $218 million ($176
million net of cash). The terms of the transaction have been unanimously
approved by both the Mellanox and Voltaire Boards of Directors. The
transaction is currently projected to close in the first quarter of
2011, subject to certain closing conditions. The combination of the two
companies will strengthen Mellanox's position as a premier, end-to-end
connectivity solutions provider for the growing worldwide data center
server and storage markets. According to Gartner*, worldwide server
shipments are expected to increase from approximately 9 million in 2010
to 11.2 million in 2014, and worldwide storage systems are expected to
grow from approximately 1.8 million in 2010 to 3.2 million in 2014.
The combined businesses currently have approximately 700 employees and
achieved revenues of $217 million for the twelve months ended Sept. 30,
Mellanox currently anticipates that the transaction will be accretive to
its fiscal 2011 non-GAAP earnings by $0.02 - $0.05 or more per share.
With highly complementary products, markets, customers and strategies,
Mellanox expects the proposed acquisition of Voltaire to enhance its
market position as a leading provider of end-to-end connectivity
solutions for servers and storage systems. The combination will also
help Mellanox achieve meaningful revenue and cost synergies over time,
with estimated, annualized cost synergies of at least $10 million by the
end of 2012.
Mellanox's Board of Directors has indicated its intention to nominate
Ronnie Kenneth, the chairman and CEO of Voltaire, to join its Board of
Directors at Mellanox's Annual General Meeting of shareholders, which it
currently anticipates will be held in May 2011. Mr. Kenneth has
indicated his intention to join the Board of Directors of Mellanox.
Mellanox and Voltaire believe that employees represent one of their most
important assets, and Mellanox looks forward to combining employees from
both organizations under one unified management team. Mellanox expects
to run the combined business from both companies' current offices
located in Israel, the United States and around the world. Further,
Mellanox intends to retain both companies' existing product lines and
will converge such lines in future product generations to ensure
continuity for customers and partners of both companies. Through this
acquisition, Mellanox expects to achieve additional scale to permit it
to operate as a larger, more successful and more profitable enterprise,
thus increasing value for the combined company's shareholders and
"The combination of Mellanox and Voltaire will create a leading provider
of connectivity solutions for our customers by leveraging the
complementary strengths of our companies. Together, we believe the
combined company will be a stronger business partner and system
solutions provider, delivering customers a comprehensive range of
end-to-end connectivity solutions," said Eyal Waldman, president,
chairman and CEO of Mellanox Technologies. "We welcome the great talent
from Voltaire and look forward to completing the integration of our
employees to create a superior combined company."
"We believe this is a great transaction for our customers, employees and
shareholders," said Ronnie Kenneth, chairman and CEO of Voltaire. "We
expect the combined company to offer our customers the financial
strength of Mellanox, industry-leading solutions and world-class
development teams that drive innovation and enhance market
Mellanox believes that the Voltaire acquisition will strengthen its
leadership position in providing end-to-end connectivity systems and
will expand its software and product offerings in the growing worldwide
data center server and storage markets it serves.
Under the terms of the definitive agreement, Voltaire shareholders will
receive $8.75 for each ordinary share of Voltaire that they hold at the
closing of the transaction. The proposed acquisition is subject to
customary closing conditions, including the receipt of applicable
regulatory approvals and the approval of Voltaire's shareholders.
In connection with the transaction, J.P. Morgan acted as exclusive
financial adviser to Mellanox, and Bank of America Merrill Lynch acted
as exclusive financial adviser to Voltaire.
Mellanox and Voltaire will jointly conduct an audio webcast to discuss
Mellanox's agreement to acquire Voltaire today at 5:30 a.m. Pacific
Time. To listen to the call, dial 973-409-9610 approximately ten minutes
prior to the start time. Presentation slides along with audio replay of
the call will be available following the call on the investor relations
section of the Mellanox website at http://ir.mellanox.com.
Voltaire (NASDAQ:VOLT) is a leading provider of scale-out computing
fabrics for data centers, high performance computing and cloud
environments. Voltaire's family of server and storage fabric switches
and advanced management software improve performance of mission-critical
applications, increase efficiency and reduce costs through
infrastructure consolidation and lower power consumption. Used by more
than 30 percent of the Fortune 100 and other premier organizations
across many industries, including many of the TOP500 supercomputers,
Voltaire products are included in server and blade offerings from Bull,
Fujitsu, HP, IBM, NEC and SGI. Founded in 1997, Voltaire is
headquartered in Ra'anana, Israel and Chelmsford, Massachusetts. More
information is available at www.voltaire.com
or by calling 1-800-865-8247
Mellanox Technologies is a leading supplier of end-to-end connectivity
solutions for servers and storage that optimize data center performance.
Mellanox products deliver market-leading bandwidth, performance,
scalability, power conservation and cost-effectiveness while converging
multiple legacy network technologies into one future-proof solution. For
the best in performance and scalability, Mellanox is the choice for
Fortune 500 data centers and the world's most powerful supercomputers.
Founded in 1999, Mellanox Technologies is headquartered in Sunnyvale,
California and Yokneam, Israel. For more information, visit Mellanox at www.mellanox.com.
In connection with the proposed transaction, Voltaire will prepare a
proxy statement to be delivered to its shareholders, and intends to
furnish such proxy statement to the Securities and Exchange Commission
under cover of Form 6-K. Before making any voting or investment decision
with respect to the transaction, investors and security holders of
Voltaire are urged to read the proxy statement and the other relevant
materials when they become available because they will contain important
information about the transaction. The proxy statement and other
documents may be obtained for free by directing such request to Voltaire
Investor Relations, telephone: +1-800-865-8247 or at www.voltaire.com.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995:
This document contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are based on our current expectations,
estimates and projections about our industry and business, management's
beliefs and certain assumptions made by us, all of which are subject to
Forward-looking statements can often be identified by words such as
"projects," "anticipates," "expects," "intends," "plans," "predicts,"
"believes," "seeks," "estimates," "may," "will," "should," "would,"
"could," "potential," "continue," "ongoing," similar expressions and
variations or negatives of these words. These forward-looking statements
are not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause our actual results to
differ materially and adversely from those expressed in any
The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking
statements: the challenges and costs of closing, integrating,
restructuring and achieving anticipated annualized cost synergies; the
ability to retain key employees; the actual worldwide server shipment
growth rate from 2011 to 2014; the actual worldwide storage systems
growth rate from 2011 to 2014; the impact of the transaction discussed
herein on the Company's actual financial results; negative customer
reaction to the proposed acquisition; the continued growth in demand for
our products; the continued, increased demand for industry
standards-based technology; our ability to react to trends and
challenges in our business and the markets in which we operate; our
ability to anticipate market needs or develop new or enhanced products
to meet those needs; the adoption rate of our products; our ability to
establish and maintain successful relationships with our OEM partners;
our ability to effectively compete in our industry; fluctuations in
demand; sales cycles and prices for our products and services; our
success converting design wins to revenue-generating product shipments;
and, our ability to protect our intellectual property rights.
In addition, if Voltaire does not receive required shareholder approval
or if the parties fail to satisfy other conditions to closing, the
transaction may not be consummated and the anticipated benefits to
Mellanox and Voltaire of the proposed acquisition would not be realized.
In any forward-looking statement in which Mellanox or Voltaire expresses
an expectation or belief as to future results, such expectation or
belief is expressed in good faith and believed to have a reasonable
basis, but there can be no assurance that the statement or expectation
or belief will result or be achieved or accomplished.
In addition, current uncertainty in the global economic environment
poses a risk to the overall economy as businesses may defer purchases in
response to tighter credit conditions, changing overall demand for our
products, and negative financial news. Consequently, our results could
differ materially from our prior results due to these general economic
and market conditions, political events and other risks and
uncertainties described more fully in our documents filed with or
furnished to the SEC.
More information about the risks, uncertainties and assumptions that may
impact the transaction and the parties' businesses is set forth in
Mellanox's Form 10-K filed with the SEC on March 5, 2010 and Form 10-Q
filed with the SEC on August 4, 2010, and Voltaire's Form 20-F filed
with the SEC on March 25, 2010, including "Risk Factors". All
forward-looking statements in this press release are based on
information available to us as of the date hereof, and we assume no
obligation to update these forward-looking statements.
Mellanox, BridgeX, ConnectX, InfiniBlast, InfiniBridge, InfiniHost,
InfiniRISC, InfiniScale, InfiniPCI, PhyX and Virtual Protocol
Interconnect are registered trademarks of Mellanox Technologies, Ltd.
CORE-Direct, and FabricIT are trademarks of Mellanox Technologies, Ltd.
All other trademarks are property of their respective owners.
*Gartner: 20 September 2010, ID: G00208105, Forecast: Servers by Form
Factor, Worldwide, 3Q10 Update and ID: G00206858, Forecast: External
Controller-Based Disk Storage, Worldwide, 2010-2014, 3Q10 Update
Mellanox Technologies, Ltd.
Brian Sparks, 408-970-3400
Asaf Somekh, +972-74-7129323
Deborah Stapleton, 650-470-0200
Nava Ladin, +972-3-6074717
Source: Mellanox Technologies, Ltd.
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