Cavium to acquire QLogic
Cavium, a provider of semiconductor products for enterprise, data centre, cloud, wired and wireless networking has announced that it will acquire QLogic, a supplier of high performance networking infrastructure technology.
This acquisition is aimed at driving significant growth in the datacentre and storage markets as QLogic’s portfolio of connectivity and storage solutions complements Cavium’s portfolio of networking, compute, and security solutions. The combined technology portfolio will allow Cavium to offer a complete end-to-end offering to customers in enterprise, cloud, data centre, storage, telecommunications and networking markets.
‘Today’s acquisition of QLogic creates a diversified pure-play infrastructure semiconductor leader,’ stated Syed Ali, president and chief executive officer of Cavium. ‘QLogic’s industry leading products further diversify our revenue and customer base.’
The transaction values QLogic at approximately $1.36 billion in equity value, inclusive of approximately $355 million of cash on QLogic’s balance sheet, and has been unanimously approved by the boards of directors of both companies.
The transaction will be funded with a combination of $220 million balance sheet cash, $750 million of committed financing, which includes $650 million of term loan and $100 million of short-term bridge debt, and $400 million in new Cavium equity.
Christine King, executive chairman of QLogic, said the deal is ‘a winning combination for customers and employees.’ She added: ‘The scale of operations of a nearly $1 billion revenue business will allow the combined company to deliver better solutions for customers and create more career opportunities for employees.’