Marvell to buy Innovium for Ethernet switch chips
Fresh off its purchase of Inphi, Marvell Technology, Inc. (NASDAQ: MRVL) is dipping into its wallet once again to purchase Innovium, Inc., a developer of switching silicon. Innovium shareholders will receive 19.05 million shares of Marvell Common Stock worth $1.1 billion in aggregate. Marvel, in addition to the Innovium assets, will take possession of cash and exercise proceeds expected at closing to be worth approximately $145 million, resulting in a net cost to Marvell of $955 million. The deal has been approved by the boards of both companies and is expected to close by the end of this calendar year, subject to customary closing conditions, including approval by Innovium’s shareholders and applicable regulatory approvals.
Founded in December 2014 and headquartered in Silicon Valley, Innovium leverages its TERALYNX architecture to make high-speed Ethernet switch chips (see, for example, “Innovium sampling TERALYNX switch silicon for 12.8 Tbps throughput”). The company’s line includes the TERALYNX 5 (1-6.4 Tbps), TERALYNX 7 (2 to 12.8 Tbps), and TERALYNX 9 (8 to 25.6 Tbps). Marvell says that a “Tier 1 cloud customer” has chosen Innovium as a “significant supplier,” which should lead to a large ramp in revenue next year. Overall, Marvell expects Innovium will drive the addition of approximately $150 million in incremental revenue next fiscal year, assuming the purchase agreement is consummated. Marvell says the transaction will be neutral to non-GAAP earnings per share in the first full quarter after the transaction closes and accretive in the first full fiscal year thereafter.
“Our acquisition of Innovium and its complementary offerings further extends Marvell’s leadership in the cloud, and I am excited that Innovium has secured significant share at a marquee cloud customer,” said Matt Murphy, president and CEO of Marvell. “Innovium has established itself as a strong cloud data center merchant switch silicon provider with a proven platform, and we look forward to working with their talented team who have a strong track record in the industry for delivering multiple generations of highly successful products.”
Innovium CTO and Cofounder Puneet Agarwal will join Marvell alongside his engineering team and other employees. Innovium CEO Rajiv Khemani, the other cofounder, will serve as an advisor to Marvell post close for an unspecified amount of time. Venture capital investors include Greylock, WRVI, Capricorn, Premji Invest, BlackRock, DFJ Growth, DAG, Qualcomm Ventures, S-Cubed, and Redline. Xilinx is also a strategic investor, according to the Innovium website.
For related articles, visit the Business Topic Center.
For more information on communications semiconductors and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.