Data Center Acquisitions: Xilinx Eying Mellanox For $5.5 Billion


Shares of Mellanox Technologies jumped nearly 7 percent following reports that the $5 billion data center hardware maker is being pursued by Xilinx for acquisition.

Mellanox, which received a five-star rating in CRN's 2018 Partner Program Guide, is set to be acquired for a value of $5.5 billion from fellow data center manufacturer and semiconductor specialist Xilinx, according to a CNBC report citing people familiar with the matter. The sources said the purchase price could top $100 per share which values the Mellanox deal at $5.5 billion.

San Jose, Calif.-based Xilinx has hired Barclays to advise on the bid to acquire Israel-based Mellanox, CNBC reported. Mellanox is scheduled to present at the Barclays Global Technology, Media and Telecommunications conference next month.

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Mellanox and Xilinx did not respond to comment by press time.

Mellanox provides a slew of data center products from Ethernet switches, chips and InfiniBand intelligent interconnect solutions to servers, storage and hyper-converged infrastructure. The company currently has a market cap of approximately $5 billion with shares trading at $92.99 as of Thursday afternoon.

In June, Mellanox appointed three new board members in a settlement with activist investment firm Starboard Value after the hedge fund, who owns a 10.5 percent stake in Mellanox, said it planned to oust all sitting directors.

Xilinx specializes in manufacturing data center products such as field-programmable gate array chips. By adding Mellanox's broad portfolio, Xilinx would greatly increase its data center offerings and technology partnerships.

Xilinx has a market cap of nearly $22 billion with shares steadily rising over the past month to $86.92 as of Thursday afternoon.