Marvell is buying Innovium for $1.1B in stock

SANTA CLARA, Calif. – Marvell Technology, Inc., a leader in infrastructure semiconductor solutions, and Innovium, Inc., a leading provider of networking solutions for cloud and edge data centers, today announced a definitive agreement, under which Marvell will acquire Innovium in an all-stock transaction.

Marvell has an extensive portfolio of Ethernet switch semiconductor solutions with a strong and growing position in the enterprise and carrier segments it services with a broad portfolio of feature-rich products. Given Marvell's growing momentum in the cloud data center market, which was further enhanced with the recent acquisition of Inphi, developing dedicated high radix, performance optimized switch silicon for use in hyperscale data centers is of growing strategic importance.

Innovium's TERALYNXTM switching architecture delivers the ultra-low latency, optimized power, high performance, and innovative telemetry that are critical in today's cloud-scale data centers. The company has steadily grown to become a strong supplier in the merchant cloud semiconductor switching market. The planned acquisition of Innovium allows Marvell to immediately participate in the fastest growing segment of the switch market with a cloud-optimized solution.

Going forward, Innovium has been selected to become a significant supplier at a Tier 1 cloud customer, and this is expected to drive a significant revenue ramp in calendar 2022. In addition, Innovium is currently engaged with several other leading cloud data center customers in building out their future network architectures.

Innovium Chief Technology Officer and Founder Puneet Agarwal, who has more than 20 years of experience in defining and architecting groundbreaking products, will join Marvell after close of the transaction. He will be joined by the talented team from Innovium who will continue to drive the cloud-optimized switch program within the combined company. Innovium CEO Rajiv Khemani will serve as an advisor to Marvell post close.

Transaction Structure and Terms

Under the terms of the definitive agreement, Innovium shareholders will receive $1.1 billion in consideration consisting of approximately 19.05 million shares of Marvell Common Stock that will be issued in aggregate in exchange for all outstanding equity of Innovium, including shares of Innovium's Preferred and Common Stock, employee equity awards, warrants and other rights of Innovium. The acquisition price of $1.1 billion is based on Marvell's 10-day VWAP as of July 30, 2021. The acquisition price includes Innovium cash and exercise proceeds expected at closing of approximately $145 million, resulting in a net cost to Marvell of $955 million. The board of directors of both companies have approved the transaction. The transaction is expected to close by the end of calendar 2021, subject to the satisfaction of customary closing conditions, including approval by Innovium's shareholders and applicable regulatory approvals.

Marvell