Wednesday, December 1, 2010

Mellanox - To InfiniBand And Beyond?

If InfiniBand is going to be a major architect in high-performance computing, it looks like Mellanox (Nasdaq:MLNX) will be a hard company to ignore. This developer of semiconductor-based connectivity products deepened its commitment to InfiniBand on Monday, announcing the acquisition of Voltaire (Nasdaq:VOLT) - a company that sells InfiniBand-based switches for servers used in high-performance environments. (Learn more about the tech industry in A Primer On Investing In The Tech Industry.)

The Terms of the Deal
Under the agreement, Mellanox will pay $8.75 a share in cash for Voltaire, for a total net deal value of $176 million. That deal implies a valuation of 1.6-times for Voltaire on an enterprise value-to-revenue basis. That valuation is a little light relative to Cisco (Nasdaq:CSCO) or QLogic (Nasdaq:QLGC), but Voltaire has never been profitable and is tiny in terms of its revenue base. QLogic is more than eight times larger in terms of revenue, and Ethernet rival Brocade (Nasdaq:BRCD) is 30-times larger. 



Please click the link for the full article:
http://stocks.investopedia.com/stock-analysis/2010/Mellanox--To-InfiniBand-And-Beyond-MLNX-VOLT-CSCO-QLGC-ORCL-HPQ-FFIV1201.aspx

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