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Marvell to conduct a deal with Aquantia
Posted on Tuesday, 07 May 2019 14:12
Marvell Technology Group is buying Aquantia, a US-based manufacturer of high-speed integrated circuits (ICs), for USD 452.00 million.

Under the terms of the transaction, the acquiror will pay USD 13.25 per share and fund the transaction using cash on hand and revolver borrowings.

The offer price represents a premium of 38.6 per cent to the target’s closing price of USD 9.56 on 3rd May, the last trading day prior to the transaction being announced.

As a result of the deal, Marvell will add to its copper and optical layer products portfolio and strengthen its position in the multi-gigabit 2.5G/5G/10G ethernet segments.

The combination of the target’s technology will also accelerate the buyer’s strategy of creating an automotive network which produces the necessary speed to enable level four and five autonomous driving.

Established in 2004, Aquantia designs, develops and markets high-speed ICs for the automotive, data centre, enterprise, infrastructure and access industries.

Its products include controllers and PHY transceivers, which support a variety of ethernet speeds and provide original equipment manufacturers with a range of design options.

The target generated revenue of USD 120.80 million for the financial year ended 31st December 2018, a 17.0 per cent increase on USD 103.40 million in the preceding 12 months.

Matt Murphy, chief executive of Marvell, said: “[…] Aquantia extends our reach in the rapidly emerging multi-gig segment of network infrastructure and creates a leading end-to-end ethernet connectivity portfolio.”

The purchase is expected to complete by the end of 2019, subject to the usual closing conditions and regulatory approvals.

Headquartered in California, Marvell provides semiconductor services and technology across the enterprise, automotive and industrial markets, among others.

It has over 5,000 employees and operates research and development centres in the US, China, India, Israel and Germany.

The deal is expected to increase Marvell’s earnings per share with immediate effect.

Furthermore, the transaction will result in annual savings of USD 40.00 million in the 12 months following completion.

There have been 459 deals targeting semiconductor and related device mamufacturers announced worldwide since the beginning of 2019, according to Zephyr, the M&A database published by Bureau van Dijk.

In the largest of these, Softbank Group sold its minority stake in US-based NVIDIA to an unknown acquiror for USD 3.63 billion.

© Zephus Ltd