Mellanox Technologies CEO Eyal Waldman (L) and Nvidia CEO Jason Huang.
(photo credit: OMER TAL)
American technology giant Nvidia’s $6.9 billion acquisition of Israeli chipmaker Mellanox Technologies earlier this month is a “milestone for the company, and a great milestone for the computer industry,” according to founder and CEO of Nvidia Jensen Huang.
“Our intentions are that Mellanox is going to be a standalone entity here in Israel, and we will continue to grow it,” Huang, sitting alongside Mellanox founder and CEO Eyal Waldman, told reporters in Yokne’am on Monday.
“Every single one of Mellanox’s product lines, all of its businesses are coveted and treasured by us, and we will continue all of that. It is our intention and hope that Eyal [Waldman] will lead Mellanox Israel,” Huang added, emphasizing that the acquisition will not lead to any layoffs of company employees.
Mellanox, headquartered in Yokne’am, was founded in 1999 and is listed on the Nasdaq Stock Market. It supplies end-to-end interconnect solutions and networking services for many of the world’s largest data center servers and storage systems.
Nvidia’s purchase of the company, acquiring all issued and outstanding common shares for $125 per share in cash, brought to an end the months of reported takeover attempts by some of the world’s biggest hi-tech firms, including Intel, Microsoft and Xilinx.
While reluctant to enter into the details of negotiations between the companies and rival bids, Huang said the process “was supremely competitive, but we had the best final offer so we won this privilege of building this great company together with Mellanox.”
Expressing his pride in building Mellanox over two decades, exceeding $1 billion in annual revenue for the first time in 2018, Waldman added his belief that he has “found a great house” for Mellanox.
“It’s not going to be an independent company anymore but it’s going to be Mellanox within Nvidia, which I think is a great achievement,” said Waldman. “And I think we’ll find the right way to continue building this entity called Mellanox.”
The transaction, the third largest “exit” of an Israeli company to date, has been approved by the boards of directors of both companies and is expected to close by the end of the calendar year.
“We see the future of the combined company as very synergistic. We’ve been working for many years together and this is the climax of getting the teams, two technologies and strategies together,” said Waldman.
Since its establishment two decades ago, Mellanox has been dual-headquartered in Israel and in the United States. Today, it boasts operations from Israel’s South to the North, with offices in Yokne’am, Tel Aviv, Beersheba, Ra’anana and Tel Hai.
“Nvidia is 26 years old and we rarely make acquisitions, because generally we like to build, create new markets and develop new technologies for markets that have never been explored. We tend to build from scratch and tend to innovate from within,” said Huang.
“However, Mellanox is a one-of-a-kind treasure that is not possible to rebuild. That’s one of the reasons why we did something quite extraordinary for our company, to make such a large acquisition.”
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