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‘Nvidia joins race for Mellanox’
Posted on Monday, 11 March 2019 12:30
Nvidia Corporation is very close to signing an agreement for billion-dollar Israeli chip manufacturer Mellanox Technologies, in the latest development of the sale, a person familiar with the matter told Reuters.

Media reports regarding the disposal of the target began this time last year and is likely to value the group at more than USD 7.00 billion in cash.

Israeli newspaper Calcalist was first to comment on the new development yesterday, suggesting Nvidia and Intel were both bidding for Mellanox.

The deal, should one be reached, is expected to boost Nvidia’s business of making chips for data centres and help it gain technology used to speed the distribution of information in this field.

Furthermore, Zephyr, the M&A database published by Bureau van Dijk, shows that if successful this would be the US-based company’s largest ever acquisition.

Reuters cited sources close to the situation as saying a deal could be announced as soon as today; however, no final decision has been made and the outcome could still change.

Nvidia, which also manufacturers chips used in computer gaming and graphics, is said to have outbid other industry rivals, including Intel, which surfaced as a potential buyer in January after submitting a bid for between USD 5.50 billion and USD 6.00 billion, media reports suggested at the time.

Shares in Mellanox jumped 12.0 per cent today to USD 122.50 following the news, giving the business a market capitalisation of USD 5.93 billion.

The Israel-based and Nasdaq-listed group is a supplier of end-to-end ethernet and infiniband intelligent interconnect solutions and services for servers, storage and hyper-converged infrastructure.

It offers a choice of high-performance services such as network and multicore processors, adapters, switches, cables and software to markets including high-performance computing, enterprise data centres, storage and network security.

During the year ended 31st December 2018, Mellanox posted total revenue of USD 1.09 billion, an increase of 26.1 per cent from USD 863.89 million in the previous 12 months.

Net profit totalled USD 134.26 million in 2018, compared to a net loss of USD 19.34 million in 2017.

© Zephus Ltd