Mellanox Tech to acquire Kotura for ~ $82 million
This move will combine high-performance interconnect solutions with leading silicon photonics technology to enable future generations of 100Gb/s speeds and beyond
Mellanox Technologies, Ltd., a supplier of end-to-end interconnect solutions for servers and storage systems, is intending to acquire privately held Kotura, Inc.
Kotura is an innovator and developer of advanced silicon photonics optical interconnect technology for high-speed networking applications.
Mellanox and Kotura have signed a definitive agreement under which Mellanox will acquire Kotura at a total cash purchase price of approximately $82 million subject to certain adjustments. The terms of the transaction have been unanimously approved by both the Mellanox and Kotura boards of directors.
The transaction is currently projected to close in the second half of 2013, subject to the completion of certain closing conditions. Mellanox currently expects the transaction to be accretive to its full fiscal year 2014 earnings by approximately $0.01 to $0.03 per share on a non-GAAP basis.
The acquisition is expected to expand Mellanox's ability to deliver cost-effective, high-speed networks with next generation optical connectivity, allowing data center customers to meet the growing demands of high-performance, Web 2.0, cloud, data center, database, financial services and storage applications.
Mellanox believes that the Kotura acquisition will enhance its ability to provide leading technologies for high speed, scalable and efficient end-to-end interconnect solutions.
Silicon photonics is expected to play a significant role in the enablement of high-speed networks. With over 120 granted or pending patents in CMOS photonics and packaging design, Kotura has made a number of ground breaking innovations in optical interconnects by integrating multiple high speed active and passive optical functions onto a silicon chip.
Kotura's technology will enable Mellanox's interconnect products to reach 100Gb/s and beyond bandwidth, and have longer reach optical connectivity at a lower cost, allowing users to further reduce their capital and operating expenses and offer new revenue-generating services.
Mellanox expects the proposed acquisition of Kotura to enhance its competiveness and its position as a leading provider of high-performance, end-to-end interconnect solutions for servers and storage systems.
Mellanox expects to establish its first R&D center in the United States at Kotura's current location. What's more, Mellanox intends to retain Kotura's existing product lines to ensure continuity for customers and partners.
"Operating networks at 100 Gigabit per second rates and higher requires careful integration between all parts of the network. We believe that silicon photonics is an important component in the development of 100 Gigabit InfiniBand and Ethernet solutions, and that owning and controlling the technology will allow us to develop the best, most reliable solution for our customers," says Eyal Waldman, president, CEO and chairman of Mellanox Technologies.
He adds, "We expect that the proposed acquisition of Kotura's technology and the additional development team will better position us to produce 100Gb/s and faster interconnect solutions with higher-density optical connectivity at a lower cost. We welcome the great talent from Kotura and look forward to their contribution to Mellanox's continued growth."
"This acquisition is important for both companies to enable interconnect innovation for data centers that require solutions that move data faster and more efficiently. Together, we can execute faster and deliver better solutions based on Kotura's silicon photonics platform that delivers the demands of 100Gb/s interconnects and beyond," comments Jean- Louis Malinge, president and CEO of Kotura, Inc. "We are delighted to join the Mellanox team and look forward to working together to propel the combined company's further growth."
The proposed acquisition is subject to customary closing conditions, including the receipt of applicable regulatory approvals and the approval of Kotura's shareholders.
In connection with the transaction, J.P. Morgan acted as exclusive financial adviser to Mellanox, and Mooreland Partners acted as exclusive financial adviser to Kotura.
An archived call discussing the acquisition is available on the investor relations section of the Mellanox website at http://ir.mellanox.com.
