Monday, November 29, 2010

Mellanox Technologies Ltd. Announces Definitive Agreement to Acquire Voltaire Ltd

SUNNYVALE, CA. and YOKNEAM, ISRAEL – Nov. 29, 2010 – Mellanox® Technologies, Ltd. (NASDAQ: MLNX; TASE: MLNX), a leading supplier of end-to-end connectivity solutions for servers and storage systems, and Voltaire Ltd. (NASDAQ: VOLT), a leading provider of scale-out data center fabrics, announced today that they have signed a definitive agreement under which Mellanox will acquire 100 percent of Voltaire’s outstanding ordinary shares for cash at a price of $8.75 per share, or a total equity value of approximately $218 million ($176 million net of cash). The terms of the transaction have been unanimously approved by both the Mellanox and Voltaire Boards of Directors. The transaction is currently projected to close in the first quarter of 2011, subject to certain closing conditions. The combination of the two companies will strengthen Mellanox’s position as a premier, end-to-end connectivity solutions provider for the growing worldwide data center server and storage markets. According to Gartner*, worldwide server shipments are expected to increase from approximately 9 million in 2010 to 11.2 million in 2014, and worldwide storage systems are expected to grow from approximately 1.8 million in 2010 to 3.2 million in 2014.

The combined businesses currently have approximately 700 employees and achieved revenues of $217 million for the twelve months ended Sept. 30, 2010.

Mellanox currently anticipates that the transaction will be accretive to its fiscal 2011 non-GAAP earnings by $0.02 - $0.05 or more per share. With highly complementary products, markets, customers and strategies, Mellanox expects the proposed acquisition of Voltaire to enhance its market position as a leading provider of end-to-end connectivity solutions for servers and storage systems. The combination will also help Mellanox achieve meaningful revenue and cost synergies over time, with estimated, annualized cost synergies of at least $10 million by the end of 2012.

Mellanox’s Board of Directors has indicated its intention to nominate Ronnie Kenneth, the chairman and CEO of Voltaire, to join its Board of Directors at Mellanox’s Annual General Meeting of shareholders, which it currently anticipates will be held in May 2011. Mr. Kenneth has indicated his intention to join the Board of Directors of Mellanox.

Mellanox and Voltaire believe that employees represent one of their most important assets, and Mellanox looks forward to combining employees from both organizations under one unified management team. Mellanox expects to run the combined business from both companies’ current offices located in Israel, the United States and around the world. Further, Mellanox intends to retain both companies’ existing product lines and will converge such lines in future product generations to ensure continuity for customers and partners of both companies. Through this acquisition, Mellanox expects to achieve additional scale to permit it to operate as a larger, more successful and more profitable enterprise, thus increasing value for the combined company’s shareholders and customers.

“The combination of Mellanox and Voltaire will create a leading provider of connectivity solutions for our customers by leveraging the complementary strengths of our companies. Together, we believe the combined company will be a stronger business partner and system solutions provider, delivering customers a comprehensive range of end-to-end connectivity solutions,” said Eyal Waldman, president, chairman and CEO of Mellanox Technologies. “We welcome the great talent from Voltaire and look forward to completing the integration of our employees to create a superior combined company.”

“We believe this is a great transaction for our customers, employees and shareholders,” said Ronnie Kenneth, chairman and CEO of Voltaire. “We expect the combined company to offer our customers the financial strength of Mellanox, industry-leading solutions and world-class development teams that drive innovation and enhance market opportunities.”

Mellanox believes that the Voltaire acquisition will strengthen its leadership position in providing end-to-end connectivity systems and will expand its software and product offerings in the growing worldwide data center server and storage markets it serves.

Under the terms of the definitive agreement, Voltaire shareholders will receive $8.75 for each ordinary share of Voltaire that they hold at the closing of the transaction. The proposed acquisition is subject to customary closing conditions, including the receipt of applicable regulatory approvals and the approval of Voltaire's shareholders.

In connection with the transaction, J.P. Morgan acted as exclusive financial adviser to Mellanox, and Bank of America Merrill Lynch acted as exclusive financial adviser to Voltaire.

Monday, November 15, 2010

SMSC Acquires Symwave, Inc.

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--SMSC (NASDAQ: SMSC), a leading semiconductor company creating valued connectivity ecosystems, today announced that it has acquired Symwave, Inc. (Symwave), a global fabless semiconductor company supplying high-performance analog/mixed-signal connectivity solutions utilizing proprietary technology, IP and silicon design capabilities. Symwave’s suite of SuperSpeed USB 3.0 compliant products and core technology deliver up to 10 times the speed of USB 2.0 devices and target external storage, cellular phones, media players, camcorders, digital cameras and other applications requiring high-speed data transfer capabilities. End products based on Symwave’s storage controller were the industry’s first to achieve the USB-IF’s USB 3.0 certification in December 2009.

“As a market leader for USB solutions, SMSC remains at the forefront of technology evolution that enhances our strong portfolio to better serve our customers and create new growth opportunities for our company,” said Christine King, President & Chief Executive Officer of SMSC. “This led to our initial investment in Symwave in 2009, whose team of engineers has since delivered the industry’s lowest power, highest performing storage products for the SuperSpeed USB market. With USB 3.0 now ready for mass deployment, SMSC is strengthening its market position through the addition of best-in-class USB 3.0 expertise to take advantage of this technological shift at the optimal time. We expect this IP will be broadly used throughout SMSC’s connectivity product portfolio.”

“SMSC has been a strong supporter of Symwave during some of the most challenging financial times in the history of our industry, and their backing enabled us to complete the product development and ramp our customers to production successfully,” said Yossi Cohen, President & Chief Executive Officer of Symwave. “We are pleased to see a successful outcome for our employees and shareholders, our customers, and our suppliers. We envisioned the emergence of USB 3.0 over 2.5 years ago and are proud of having delivered on our vision with multiple successful products.”

Symwave has developed a host of standards-based physical layer (PHY), low power analog front end (AFE) cores, integrated circuits (ICs) and semiconductor system solutions. These solutions feature patented technical innovations that enable multi-gigabit per second data transfer rates with extremely low power and excellent electrical performance. In addition, Symwave provides software, reference designs, and a complete development environment for USB storage applications.

Symwave products have already been qualified by most of the major storage OEM companies worldwide and are shipping in excess of a million units per month. This is expected to contribute to SMSC’s USB revenue stream and accelerate SMSC’s entry into the USB 3.0 market.

SMSC had previously made a $5.2 million equity investment in Symwave, resulting in a total equity stake of 14 percent, and recently provided $3.1 million in bridge financing to Symwave. Under terms of the agreement, SMSC also agreed to make cash payments to Symwave shareholders as part of an earnout provision upon achievement of certain financial goals during calendar year 2011. Headquartered in Laguna Niguel, CA, with design centers in San Diego, CA and Shenzhen, China, Symwave has approximately 90 employees, of which over 60 are in Asia. The acquisition closed on November 12, 2010.