Nvidia Acquires Mellanox for $6.9 Billion

The price reflects a 17% premium on the market value of the Israeli technology company; Nvidia wants to strengthen data center operations, which provided a third of its revenue in 2018

Israeli big data connectivity company Mellanox is sold for $6.9 billion to Nvidia. The boards of directors of both companies approved the deal during the last few hours.
This is a 17% premium on Mellanox’s market value, based on Nasdaq’s closing price of $5.93 billion, on the Nasdaq Stock Exchange on Friday after its share price has risen 66% since October and 18% this year.

Published in October for the first time at CNBC, Mellanox received two acquisition offers, as well as strong growth in revenues and profitability.

Yokneam-based Mellanox founded in 1999 by the CEO Eyal Waldman. The company produces interconnect solutions for big data using InfiniBand and Ethernet technologies.

The goal of Nvidia in Mellanox’s acquisition is to boost Nvidia’s growth in the data center field, which provided it with a revenue of $2.9 billion in 2018. Nvidia is traded at a market value of $91 billion following a 38% decline in its share price over the past year. The company employs 13,000 people. Its main activity is the production and marketing of graphics processors, video cards, chipsets and chips for smartphones and tablets. The company’s value plunged from $ 175 billion six months ago, following the crisis in the crypto market, in which it began operations.

Nvidia has an artificial intelligence research center in Israel, under Prof. Gal Chechik.

“The emergence of AI and data science, as well as billions of computer users at the same time, fuels the demands of the world’s data centers,” said Jensen Huang, co-founder, and CEO of Nvidia. “Coping with these requirements requires holistic architectures that connect a huge number Of high-speed computing nodes on smart networks to create a giant-scale data center engine. ”

Huang added, “We are excited to unify Nvidia’s accelerated computing platform with Mellanox’s world-class accelerated network platform under one roof to create the next generation of large-scale computing solutions, and I am particularly excited to work closely with the visionary leaders Of Mellanox and their amazing people in inventing the computers of tomorrow. ”

Eyal Waldman, founder, and CEO of Mellanox, said: “We share the same vision for accelerated computing at Nvidia. The combination of our two companies comes as a natural extension of our long-standing partnership. This combination will foster the creation of powerful technology and excellent opportunities for our people. ”

 

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