Shares in Israel's EZChip Halted After Reports of Acquisition by Mellanox

If a deal is reached, EZchip Semiconductor - which has a market value of $662 million - will be delisted from Nasdaq and the Tel Aviv exchange.

Tova Cohen
Eli Fruchter, president and CEO of EZchip.
Eli Fruchter, president and CEO of EZchip.Credit: Hagay Frid
Tova Cohen

REUTERS - Chip designer Mellanox Technologies Ltd has agreed to acquire network communications chip maker EZchip Semiconductor Ltd for $811 million as it expands its product portfolio for high-performance computing.

The offer price of $25.50 per share represents a premium of 16 percent to EZchip's closing price on Tuesday.

Mellanox said the acquisition pursues its strategy to become the leading supplier of interconnect solutions for software-defined data centres.

Mellanox, with a market value of $1.85 billion, makes InfiniBand products that enables databases, servers and computers to communicate. By buying EZchip the company adds Ethernet network processors to the list.

"The new and emerging Web 2.0 and cloud applications that influence our day-to-day lives depend on fast data movement and processing," Mellanox Chief Executive Eyal Waldman said.

"EZchip's processing solutions allow users to process and analyze ... data both within and outside the data centre."

The deal, which has been approved by the boards of both companies, is expected to close in the first quarter of 2016 and be immediately accretive to adjusted earnings. The combined businesses have 2,400 employees, and revenue of $668 million for the year ended June 30, 2015.

EZchip's shares had been halted for trade in Tel Aviv all day pending what it said would be a significant announcement. This followed a report in Israel's Calcalist newspaper that Mellanox was in talks to buy EZchip.

Mellanox will fund the transaction with cash on hand and $300 million in fully-committed debt financing.

Click the alert icon to follow topics:



Automatic approval of subscriber comments.

$1 for the first month

Already signed up? LOG IN

Protesters demonstrating in front of the consulate general of Israel in New York last year.

Huge Gap Between Young, Old Americans' View on Israel-Palestine

Rep. Henry Cuellar attends a campaign event on Wednesday, in San Antonio, Texas.

AIPAC-backed Dem Declares Victory Against Progressive Challenger in Texas Runoff

Iranian President Ebrahim Raisi and Atomic Energy Organization of Iran chief Mohammad Eslami at an event for Nuclear Technology Day in Tehran, last month.

Prospects for Reviving Iran Nuclear Deal 'Tenuous' at Best, U.S. Envoy Says

A family grieves outside the SSGT Willie de Leon Civic Center following the mass shooting at Robb Elementary School in Uvalde, Texas on Wednesday.

Israeli PM Offers Condolences After Texas Gunman Kills 21 at Elementary School

U.S. President Joe Biden, this week.

Biden Decides to Keep Iran's Revolutionary Guards on Terror List, Says Report

ADL CEO Jonathan Greenblatt.

Progressive Jews Urge ADL Chief to Apologize for Calling Out Democratic Activist