Marvell and Cavium to Combine Creating an Infrastructure Solutions Powerhouse

Highlights:

  • Complementary portfolios and scale enable world-class end-to-end solutions
  • Diversifies revenue base and end markets; increases SAM to $16 billion+
  • Combined R&D innovation engine and IP portfolio accelerates product leadership
  • Creates best-in-class financial model

Marvell Technology Group Ltd. and Cavium, Inc. announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Cavium common stock in exchange for consideration of $40.00 per share in cash and 2.1757 Marvell common shares for each Cavium share. Upon completion of the transaction, Marvell will become a leader in infrastructure solutions with approximately $3.4 billion1 in annual revenue.

The transaction combines Marvell’s portfolio of leading HDD and SSD storage controllers, networking solutions and high-performance wireless connectivity products with Cavium’s portfolio of leading multi-core processing, networking communications, storage connectivity and security solutions. The combined product portfolios provide the scale and breadth to deliver comprehensive 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. This transaction also creates an R&D innovation engine to accelerate product development, positioning the company to meet today’s massive and growing demand for data storage, heterogeneous computing and high-speed connectivity.

“This is an exciting combination of two very complementary companies that together equal more than the sum of their parts,” said Marvell President and Chief Executive Officer, Matt Murphy. “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. I’m equally excited that Cavium’s Co-founder Raghib Hussain and Vice President of IC Engineering Anil Jain will also join my senior leadership team. Together, we all will be able to deliver immediate and long-term value to our customers, employees and shareholders.”

“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,” said Cavium Co-founder and Chief Executive Officer, Syed Ali. “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.”

The transaction is expected to generate at least $150 to $175 million of annual run-rate synergies within 18 months post close and to be significantly accretive to revenue growth, margins and non-GAAP EPS.

For more read visit: cavium.com