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November 29, 2010
SUNNYVALE, Calif., and YOKNEAM, Israel, Nov. 29 -- Mellanox Technologies, Ltd., a leading supplier of end-to-end connectivity solutions for servers and storage systems, and Voltaire Ltd., a leading provider of scale-out datacenter fabrics, announced today that they have signed a definitive agreement under which Mellanox will acquire 100 percent of Voltaire's outstanding ordinary shares for cash at a price of $8.75 per share, or a total equity value of approximately $218 million ($176 million net of cash).
The terms of the transaction have been unanimously approved by both the Mellanox and Voltaire Boards of Directors. The transaction is currently projected to close in the first quarter of 2011, subject to certain closing conditions. The combination of the two companies will strengthen Mellanox's position as a premier, end-to-end connectivity solutions provider for the growing worldwide datacenter server and storage markets. According to Gartner*, worldwide server shipments are expected to increase from approximately 9 million in 2010 to 11.2 million in 2014, and worldwide storage systems are expected to grow from approximately 1.8 million in 2010 to 3.2 million in 2014.
The combined businesses currently have approximately 700 employees and achieved revenues of $217 million for the twelve months ended Sept. 30, 2010.
Mellanox currently anticipates that the transaction will be accretive to its fiscal 2011 non-GAAP earnings by $0.02 - $0.05 or more per share. With highly complementary products, markets, customers and strategies, Mellanox expects the proposed acquisition of Voltaire to enhance its market position as a leading provider of end-to-end connectivity solutions for servers and storage systems. The combination will also help Mellanox achieve meaningful revenue and cost synergies over time, with estimated, annualized cost synergies of at least $10 million by the end of 2012.
Mellanox's Board of Directors has indicated its intention to nominate Ronnie Kenneth, the chairman and CEO of Voltaire, to join its Board of Directors at Mellanox's Annual General Meeting of shareholders, which it currently anticipates will be held in May 2011. Mr. Kenneth has indicated his intention to join the Board of Directors of Mellanox.
Mellanox and Voltaire believe that employees represent one of their most important assets, and Mellanox looks forward to combining employees from both organizations under one unified management team. Mellanox expects to run the combined business from both companies' current offices located in Israel, the United States and around the world. Further, Mellanox intends to retain both companies' existing product lines and will converge such lines in future product generations to ensure continuity for customers and partners of both companies. Through this acquisition, Mellanox expects to achieve additional scale to permit it to operate as a larger, more successful and more profitable enterprise, thus increasing value for the combined company's shareholders and customers.
"The combination of Mellanox and Voltaire will create a leading provider of connectivity solutions for our customers by leveraging the complementary strengths of our companies. Together, we believe the combined company will be a stronger business partner and system solutions provider, delivering customers a comprehensive range of end-to-end connectivity solutions," said Eyal Waldman, president, chairman and CEO of Mellanox Technologies. "We welcome the great talent from Voltaire and look forward to completing the integration of our employees to create a superior combined company."
"We believe this is a great transaction for our customers, employees and shareholders," said Ronnie Kenneth, chairman and CEO of Voltaire. "We expect the combined company to offer our customers the financial strength of Mellanox, industry-leading solutions and world-class development teams that drive innovation and enhance market opportunities."
Mellanox believes that the Voltaire acquisition will strengthen its leadership position in providing end-to-end connectivity systems and will expand its software and product offerings in the growing worldwide datacenter server and storage markets it serves.
Under the terms of the definitive agreement, Voltaire shareholders will receive $8.75 for each ordinary share of Voltaire that they hold at the closing of the transaction. The proposed acquisition is subject to customary closing conditions, including the receipt of applicable regulatory approvals and the approval of Voltaire's shareholders.
In connection with the transaction, J.P. Morgan acted as exclusive financial adviser to Mellanox, and Bank of America Merrill Lynch acted as exclusive financial adviser to Voltaire.
Mellanox and Voltaire will jointly conduct an audio webcast to discuss Mellanox's agreement to acquire Voltaire today at 5:30 a.m. Pacific Time. To listen to the call, dial 973-409-9610 approximately ten minutes prior to the start time. Presentation slides along with audio replay of the call will be available following the call on the investor relations section of the Mellanox website at http://ir.mellanox.com.
Voltaire (NASDAQ: VOLT) is a leading provider of scale-out computing fabrics for datacenters, high performance computing and cloud environments. Voltaire's family of server and storage fabric switches and advanced management software improve performance of mission-critical applications, increase efficiency and reduce costs through infrastructure consolidation and lower power consumption. Used by more than 30 percent of the Fortune 100 and other premier organizations across many industries, including many of the TOP500 supercomputers, Voltaire products are included in server and blade offerings from Bull, Fujitsu, HP, IBM, NEC and SGI. Founded in 1997, Voltaire is headquartered in Ra'anana, Israel, and Chelmsford, Mass. More information is available at www.voltaire.com or by calling 1-800-865-8247
Mellanox Technologies (NASDAQ: MLNX; TASE: MLNX) is a leading supplier of end-to-end connectivity solutions for servers and storage that optimize datacenter performance. Mellanox products deliver market-leading bandwidth, performance, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof solution. For the best in performance and scalability, Mellanox is the choice for Fortune 500 datacenters and the world's most powerful supercomputers. Founded in 1999, Mellanox Technologies is headquartered in Sunnyvale, Calif., and Yokneam, Israel. For more information, visit Mellanox at www.mellanox.com.
In connection with the proposed transaction, Voltaire will prepare a proxy statement to be delivered to its shareholders, and intends to furnish such proxy statement to the Securities and Exchange Commission under cover of Form 6-K. Before making any voting or investment decision with respect to the transaction, investors and security holders of Voltaire are urged to read the proxy statement and the other relevant materials when they become available because they will contain important information about the transaction. The proxy statement and other documents may be obtained for free by directing such request to Voltaire Investor Relations, telephone: +1-800-865-8247 or at www.voltaire.com.
*Gartner: 20 September 2010, ID: G00208105, Forecast: Servers by Form Factor, Worldwide, 3Q10 Update and ID: G00206858, Forecast: External Controller-Based Disk Storage, Worldwide, 2010-2014, 3Q10 Update
Source: Mellanox Technologies, Ltd.
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