MLNX buys EZ Chip

[Admin]

Does this make AMCC a competitor of MLNX? MLNX supplies connectivity for some AMCC products.

www.thestreet.com/story/13307337/1/mellanox-technologies-mlnx-stock-falls-on-ezchip-acquisition.html?puc=yahoo&cm_ven=YAHOO

I bet AMCC turned down an offer from MLNX first.

Of course, this could also signal consolidation in the Arm server $pace.

[christopher]

What is any comparison between AMCC and  EXCH in value or potential sale?

Beginning Q 1 2015, 5/13/2015,

EZCH posts Q 1 loss of $8.3 Million. Revenue recorded for the first Quarter period was $26.9 Million.

Q 2 2015, 8/12/2015,

EZCH posts Q2 profit of $5.4 Million. Revenue increased 28% year over year to $28.3 Million.


September 2015, EZ Chip was sold to Mellanox for $811 Million or $25.50 share

EZ Chip has a 52 week high of $25.21 and currently(10/1/15) trades at $25.07 share

What it all comes down to is:  EXCH was sold for .29 more than the 52 week high.

Also, the share price when a sale was announced (9/25/2015) was around $22.50. Less than $3.00 to what the sale price agreement was.

It looks to me that EZCH was sold at a low price ? or is my math off ??

[Admin]

We are in a deflation, so I am not expecting huge buyout prices. It is on the low side though. I'm thinking too that this is a strategic merger of two Israeli companies in order to combine processing and interconnect and to offer complete solutions. I'm a little worried that AMCC gets some of their interconnect technology from MLNX. I wonder if this could prove to be an issue going forward? Is MLNX now a competitor? I want the earnings call to get here so that I can hear how Gopi responds to this... ...I almost want to hear that more than I want to hear that they made their $39M number (not quite).

[christopher]

right on phobos,

Sure looks like a strategic merger to me.

www.bloomberg.com/news/articles/2015-10-01/mellanox-ezchip-merger-could-make-system-on-chip-by-2018-ceo

[Admin]

From the article, good find by the way, it seems like MLNX is a little late to the party, unless they plan on withholding technology from APM, which at that point (2018) APM would be a competitor. If you think about it, high speed design know-how is what enables the telecom chip manufacturers in conjunction with processor IP from ARM to make a go of it. MLNX leads the industry in high-speed design. I wonder what Gopi will say about this.

[Admin]

www.rethink-wireless.com/2015/10/05/mellanox-targets-telcos-ezchip-buy.htm

"EZchip brings a rich dowry. It has products in security, deep packet inspection, video and storage processing, all of which will feed into end-to-end, intelligent Ethernet solutions from 10Gbps to 100Gbps."

www.eetimes.com/document.asp?doc_id=1327871

"Kevin Deierling, VP of marketing at Mellanox, told EETimes that the deal would bring some EZchip carrier-focused technologies into the data center, while it would be able to ride the movement of those cloud platforms into telco environments. "We think the combination of the two companies puts us in a really unique position to address that evolution of the telco towards more of a cloud data center model," he said."

"In July 2014, EZchip upped its game in C-RAN and software-defined networking (SDN) when it acquired massively parallel processor start-up Tilera (a supplier to Cisco), to make itself more competitive against Broadcom and Cavium."

If MLNX/EZChip is more competitive against CAVM, then shouldn't they also be more competitive against AMCC?