Networking equipment powerhouse Mellanox could be an acquisition target by Microsoft, according to a published report in the Israeli financial publication TheMarker.
Microsoft has reportedly gone so far as to engage Goldman Sachs to handle negotiations with Mellanox. The maker of InfiniBand and Ethernet interconnect and other equipment for servers and storage reported record revenues of $279.2 million for the quarter ended Sept. 30, a YoY increase of 24 percent. Profits for the quarter were $37 million, up from $3 million in 2017.
TheMarker reported that Microsoft is a major customer of Mellanox’s “and sees an acquisition as a way to strengthen its services in cloud computing as it competes with the likes of Amazon and Google.”
But Microsoft may not be Mellanox’s only suitor. London-based DatacenterDynamics reported that FPGA chipmaker Xilinx, along with Intel and Broadcom, also could be interested in acquiring the company.
In November, CNBC reported that Xilinx was working with Barclays on a purchase priced at $100/share, or about $5 billion.
Last year, activist investor Starboard Value acquired a 10.7 percent stake in Mellanox, and pressured the company to better its financial position and explore a potential sale.
Israel-based Mellanox was founded in 1999 by former Intel and Galileo Technology executives and went public in 2007. With nearly 3,000 employees worldwide, Mellanox equipment is used in more than half of the world’s publicly-listed fastest computers.