Innovium CTO and Founder Puneet Agarwal will join Marvell after closing of the transaction
American chip company Marvell Technology Inc has announced that it is buying out cloud and data centers networking solutions provider Innovium Inc in an all-stock transaction.
Marvell has an extensive portfolio of Ethernet switch semiconductor solutions with a strong and growing position in the enterprise and carrier segments it services with a broad portfolio of feature-rich products.
Under the terms of the definitive agreement, Innovium shareholders will receive $1.1 billion in consideration consisting of approximately 19.05 million shares of Marvell Common Stock that will be issued in aggregate in exchange for all outstanding equity of Innovium.
The acquisition price includes Innovium cash and exercise proceeds expected at closing of approximately $145 million, resulting in a net cost to Marvell of $955 million.
“Given Marvell’s growing momentum in the cloud data center market, which was further enhanced with the recent acquisition of Inphi, developing dedicated high radix, performance-optimized switch silicon for use in hyper scale data centers is of growing strategic importance,” the company said in a statement.
The statement added that the planned acquisition of Innovium, which has steadily grown to become a strong supplier in the merchant cloud semiconductor switching market, will allow Marvell to immediately participate in the fastest-growing segment of the switch market with a cloud-optimized solution.
Innovium Chief Technology Officer and Founder Puneet Agarwal, who has more than 20 years of experience in defining and architecting groundbreaking products, will join Marvell after close of the transaction.
He will be joined by the talented team from Innovium who will continue to drive the cloud-optimized switch program within the combined company. Innovium CEO Rajiv Khemani will serve as an advisor to Marvell post-close.
The company added that going forward, Innovium has been selected to become a significant supplier at a Tier 1 cloud customer, and this is expected to drive a significant revenue ramp in calendar 2022.
In addition, Innovium is currently engaged with several other cloud data center customers in building out their future network architectures.
The transaction, expected to close by the end of calendar 2021, has been approved by the board of directors of both companies.
