Story image

Marvell pushes further into data center space with $6b Cavium acquisition

23 Nov 2017

Marvell Technology Group has announced it will acquire Cavium in a deal worth $6 billion.

Once the companies have merged, Marvel is estimated to have $3.4 billion in annual revenue, while the transaction is expected to generate at least $150 to $175 million of annual run-rate synergies within 18 months post close.

Marvell president and chief executive officer, Matt Murphy, calls the acquisition an exciting combination of two very complementary companies that together equal more than the sum of their parts. 

The combined portfolio includes end-to-end solutions for customers across the cloud data center, enterprise and service provider markets, and expands Marvell's serviceable addressable market to more than $16 billion.

Murphy says, "This combination expands and diversifies our revenue base and end markets, and enables us to deliver a broader set of differentiated solutions to our customers. Syed Ali has built an outstanding company, and I'm excited that he is joining the Board.”

Cavium's co-founder Raghib Hussain and vice president of IC Engineering Anil Jain will join Marvell’s senior leadership team.

"Together, we all will be able to deliver immediate and long-term value to our customers, employees and shareholders," adds Murphy.

Cavium co-founder and chief executive officer, Syed Ali, adds,"Individually, our businesses are exceptionally strong, but together, we will be one of the few companies in the world capable of delivering such a comprehensive set of end-to-end solutions to our combined customer base.”

"Our potential is huge. We look forward to working closely with the Marvell team to ensure a smooth transition and to start unlocking the significant opportunities that our combination creates."

Under the terms of the definitive agreement, Marvell will pay Cavium shareholders $40.00 in cash and 2.1757 Marvell common shares for each share of Cavium common stock.

Cavium shareholders are expected to own approximately 25% of the combined company on a pro forma basis.

Marvell intends to fund the cash consideration with a combination of cash on hand from the combined companies and $1.75 billion in debt financing.

In addition, Marvell has obtained commitments consisting of an $850 million bridge loan commitment and a $900 million committed term loan from Goldman Sachs Bank USA and Bank of America Merrill Lynch.

The transaction is expected to close in mid-calendar 2018.

GitHub launches fund to sponsor open source developers
In addition to GitHub Sponsors, GitHub is launching the GitHub Sponsors, GitHub will match all contributions up to $5,000 during a developer’s first year in GitHub Sponsors.
Check Point announces integration with Microsoft Azure
The integration of Check Point’s advanced policy enforcement capabilities with Microsoft AIP’s file classification and protection features enables enterprises to keep their business data and IP secure, irrespective of how it is shared. 
Why AI will be procurement’s greatest ally
"AI can help identify emerging suppliers, technologies and products in specific categories."
Are AI assistants teaching girls to be servants?
Have you ever interacted with a virtual assistant that has a female-based voice or look, and wondered whether there are implicitly harmful gender biases built into its code?
Google 'will do better' after G Suite passwords exposed since 2005
Fourteen years is a long time for sensitive information like usernames and passwords to be sitting ducks, unencrypted and at risk of theft and corruption.
Hackbusters! Reviewing 90 days of cybersecurity incident response cases
While there are occasionally very advanced new threats, these are massively outnumbered by common-or-garden email fraud, ransomware attacks and well-worn old exploits.
Data#3 to exclusively provide MS licences to WA Government
The technology services provider has won two contracts with the Western Australia Government, becoming its sole Microsoft licence provider.
Why cash is no longer king in Australia
Australia is leading the way in APAC for granting credit on B2B transactions.