Marvell buys Aquantia for $452M in cash

building blocks
Chipmaker Marvell Technology Group is buying Aquantia to bolster its portfolio of high-speed networking offerings. (Pixabay)

After approval from both boards of directors, chip vendor Marvell Technology Group announced it's buying Aquantia for $452 million in cash.

Santa Clara, California-based Marvell is paying $13.25 per share for Aquantia in a deal that Marvell expects will close in the second half of this year once it passes customary closing conditions and regulatory approval.

Marvell said the acquisition of Aquantia complements its portfolio of copper and optical physical layer product offerings, and extends its position in the multi-gigabit 2.5G/5G/10G Ethernet segments.

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Marvell also cited Aquantia's in-car high-speed technology as a primary reason for the deal. Marvell plans to combine Aquantia's multigig automotive PHYs with its gigabit PHY and secure switch products in order to provision autonomous vehicles.

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As the automotive industry increasingly adopts Ethernet in-vehicle networks for mainstream models, the number of related ports is expected to grow dramatically at a 62% annualized growth trajectory, from 53 million in 2018 to 367 million by 2022, according to Marvell.

"Our acquisition of Aquantia will fuel Marvell's leadership in the transformation of the in-car network to high-speed Ethernet over the next decade," said Matt Murphy, president and CEO of Marvell, in a statement. "At the same time, Aquantia extends our reach in the rapidly emerging Multi-Gig segment of network infrastructure and creates a leading end-to-end Ethernet connectivity portfolio."

The deal is expected to be immediately accretive to Marvell's non-GAAP earnings per share, and generate annual run-rate synergies of $40 million to be realized within 12 months after the transaction closes.

Last year, Marvell took over Cavium by offering about $5.5 billion for outstanding shares of Cavium, and absorbing Cavium’s debt of about $637.6 million, which brought the value of the deal to more than $6.1 billion. 

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