NVIDIA Strikes $6.9B Deal to Buy Mellanox; Jensen Huang, Eyal Waldman Quoted

NVIDIA (Nasdaq: NVDA) agreed to acquire Mellanox Technologies (MLNX) for approximately $6.9B in a push to expand its footprint in the high-performance computing market.

NVIDIA said Monday it will pay $125 in cash for each share of Mellanox through a deal, which is expected to close by the end of 2019, subject to approvals by Mellanox shareholders and regulators.

Jensen Huang, founder and CEO of NVIDIA, said the transaction will allow the company to combine its accelerated computing platform with Mellanox’s accelerated networking system to address the rising demand for data center-scale computing technologies driven by the emergence of data science and artificial intelligence.

“Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures,” said Eyal Waldman, founder and CEO of Mellanox.

The boards of directors from both companies approved the acquisition, which is expected to be accretive to NVIDIA’s non-GAAP earnings per share, free cash flow and non-GAAP gross margin upon the deal’s completion.

NVIDIA manufactures graphic processing units and Mellanox supplies Infiniband interconnect technology platforms and Ethernet products used in data centers and supercomputers.

Goldman Sachs and Co. and Jones Day respectively served as financial and legal advisers to NVIDIA in the transaction. Credit Suisse Group and J.P. Morgan Chase and Co. advised Mellanox on the deal’s financial aspect while and Latham & Watkins LLP and Herzog Fox and Neeman acted as legal advisers.

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