Monday, May 6th 2019
Marvell to Acquire AQuantia for Approximately $452 Million
Marvell Technology Group Ltd., a leader in infrastructure semiconductor solutions, and Aquantia, Corp., a leader in Multi-Gig Ethernet connectivity, today announced a definitive agreement, approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Aquantia common stock in exchange for consideration of $13.25 per share in cash.
The acquisition of Aquantia complements Marvell's portfolio of copper and optical physical layer product offerings and extends its position in the Multi-Gig 2.5G/5G/10G Ethernet segments. In particular, Aquantia's innovative Multi-gig automotive PHYs, coupled with Marvell's industry-leading gigabit PHY and secure switch products, creates the broadest and most advanced range of high-speed in-car networking solutions in the world. This unique combination accelerates Marvell's vision for the future of automotive networking with speeds necessary to enable level 4 and 5 autonomous driving.
As the automotive industry increasingly adopts Ethernet in-vehicle networks for mainstream models, the number of related ports is expected to grow dramatically at a 62% annualized growth trajectory, from 53 million in 2018 to 367 million by 2022.
"Our acquisition of Aquantia will fuel Marvell's leadership in the transformation of the in-car network to high-speed Ethernet over the next decade," said Matt Murphy, president and CEO of Marvell. "At the same time, Aquantia extends our reach in the rapidly emerging Multi-Gig segment of network infrastructure and creates a leading end-to-end Ethernet connectivity portfolio."
"Marvell and Aquantia share a vision where the network - whether in an autonomous vehicle, an enterprise application or in cloud infrastructure - can seamlessly power the data economy," said Faraj Aalaei, chairman and CEO of Aquantia. "This is a fantastic opportunity as our customers will benefit from Marvell's global scale and expanding footprint in Multi-Gig network applications."
The transaction is expected to be immediately accretive to Marvell's non-GAAP earnings per share and generate significant annual run-rate synergies of $40 million to be realized within 12 months after the transaction closes.
Transaction Structure and Terms
Under the terms of the definitive agreement, Marvell will pay Aquantia's stockholders $13.25 per share in cash. This represents approximately $452 million in transaction value after adjusting for net cash on Aquantia's balance sheet. Marvell intends to finance the transaction with cash on hand and revolver borrowings. The transaction is not subject to any financing condition and is expected to close by the end of CY2019, subject to regulatory approval as well as other customary closing conditions, including the adoption by Aquantia's stockholders of the merger agreement.
In connection with the execution of the definitive agreement, certain stockholders of Aquantia, together holding approximately 17 percent of the outstanding shares of common stock of Aquantia, have agreed to vote their shares in favor of the transaction under a voting and support agreement.
Marvell Preliminary First Fiscal Quarter 2020 Results
Based on preliminary financial information, Marvell expects its first quarter revenue to be in the range of $650 million+/- 3%, the same range as guided on March 7, 2019. Further information regarding first fiscal quarter results will be released on May 30 at 1:45 p.m. Pacific Time. This update is an estimate, based on information available to management as of the date of this release, and may be subject to further changes upon completion of Marvell'sstandard quarter closing procedures. This update does not present all necessary information for an understanding of Marvell's financial condition as of May 4, 2019, or its results of operations for the quarter ended May 4, 2019.
The acquisition of Aquantia complements Marvell's portfolio of copper and optical physical layer product offerings and extends its position in the Multi-Gig 2.5G/5G/10G Ethernet segments. In particular, Aquantia's innovative Multi-gig automotive PHYs, coupled with Marvell's industry-leading gigabit PHY and secure switch products, creates the broadest and most advanced range of high-speed in-car networking solutions in the world. This unique combination accelerates Marvell's vision for the future of automotive networking with speeds necessary to enable level 4 and 5 autonomous driving.
"Our acquisition of Aquantia will fuel Marvell's leadership in the transformation of the in-car network to high-speed Ethernet over the next decade," said Matt Murphy, president and CEO of Marvell. "At the same time, Aquantia extends our reach in the rapidly emerging Multi-Gig segment of network infrastructure and creates a leading end-to-end Ethernet connectivity portfolio."
"Marvell and Aquantia share a vision where the network - whether in an autonomous vehicle, an enterprise application or in cloud infrastructure - can seamlessly power the data economy," said Faraj Aalaei, chairman and CEO of Aquantia. "This is a fantastic opportunity as our customers will benefit from Marvell's global scale and expanding footprint in Multi-Gig network applications."
The transaction is expected to be immediately accretive to Marvell's non-GAAP earnings per share and generate significant annual run-rate synergies of $40 million to be realized within 12 months after the transaction closes.
Transaction Structure and Terms
Under the terms of the definitive agreement, Marvell will pay Aquantia's stockholders $13.25 per share in cash. This represents approximately $452 million in transaction value after adjusting for net cash on Aquantia's balance sheet. Marvell intends to finance the transaction with cash on hand and revolver borrowings. The transaction is not subject to any financing condition and is expected to close by the end of CY2019, subject to regulatory approval as well as other customary closing conditions, including the adoption by Aquantia's stockholders of the merger agreement.
In connection with the execution of the definitive agreement, certain stockholders of Aquantia, together holding approximately 17 percent of the outstanding shares of common stock of Aquantia, have agreed to vote their shares in favor of the transaction under a voting and support agreement.
Marvell Preliminary First Fiscal Quarter 2020 Results
Based on preliminary financial information, Marvell expects its first quarter revenue to be in the range of $650 million+/- 3%, the same range as guided on March 7, 2019. Further information regarding first fiscal quarter results will be released on May 30 at 1:45 p.m. Pacific Time. This update is an estimate, based on information available to management as of the date of this release, and may be subject to further changes upon completion of Marvell'sstandard quarter closing procedures. This update does not present all necessary information for an understanding of Marvell's financial condition as of May 4, 2019, or its results of operations for the quarter ended May 4, 2019.
10 Comments on Marvell to Acquire AQuantia for Approximately $452 Million
Sorry no Aquantia was neither cheap or good. Aquantia was a predatory consumer company that was the “razor” of the consumer networking world.
It seems Marvell is mostly interested in their in-car tech, so maybe they'll even stop the production of the other parts.
That would suck big time.
Aquantia also have excellent support, based on my own experience with them and having issues with my cards. They got a new firmware put together in a couple of weeks time and they've been updating their drivers regularly to improve their products. Not expecting that from Marvell, as they're way too big of a corporation to care.
On top of that, it means less competition, which is never a good thing.Please, you're comparing fibre with copper? I simply wouldn't want fibre, as it's a hassle to deal with and it requires a noisy enterprise grade switch. It never was and never will be intended for consumers. And stop comparing used to new, that's never a fair comparison.
You're entitled to your opinion, but you clearly have zero experience of Aquantia's products.
I also think that as a staff member here, you should have more sense than calling companies names.
Glad you had a better experience. Try not to twist peoples words though, your not that good at it.
And again, how is comparing second hand to new a fair comparison? I think you should buy a second hand car, as it's better value than a new car and screw your opinion.
Because I remember buying my first gigabit NICs way back in 2005(?) or so?
14 years later still using gigabit !!
That is definitely not normal, 2.5, 5 or 10gbps should have been commodified many, many years ago and be present an all motherboards by now.
HDD's have increased capacity 10-20 times in 14 years, SSDs appeared and data speeds increased from under 50MB/s to over 3000MB/s... yet we're still using the same network speeds like back then.
Something must have slowed the development and introduction... and it's not technology that's for sure !
My guess is that Marvell had enough of it and did ^THAT. I wouldn't be surprised if in 2 years time all motherboards everywhere will have by default integrated 10gpbs "Marvell" chips
However, the issue was/is that it's costly to make the hardware. With IC production nodes having shrunk significantly since then, we've gotten chips that can be produced at a reasonable cost and that no longer need active cooling. Until that happened, it was never going to be a consumer technology.
Marvell has been making 10Gbps products for years, they've simply not targeted consumers. In fact, most of the affordable and prosumer targeted 10Gbps and multi gig switches have Marvell hardware in them.
But I would take it ! Definitely beats having the network 30 times slower than the storage !
Bring it Marvell already... can't wait.