November 29, 2010, 11:14 AM — Mellanox Technologies announced Monday it is acquiring fellow networking vendor Voltaire for roughly $218 million. The deal, which is subject to shareholder approval, is expected to close in the first quarter of next year.
The deal will give Mellanox more scale as well as penetration into verticals such as financial services and energy, executives said during a conference call.
Both companies are best known for their Infiniband interconnect technologies, but also sell Ethernet-based products.
Mellanox plans to keep both companies' product lines, but also intends to converge them in the future, according to a statement.
Both vendors primarily make their money from systems vendors that embed the technology in their own products, said Forrester Research analyst Andrew Reichman. Mellanox is no doubt eager to gain from Voltaire's partnerships with the likes of Hewlett-Packard, he said.
Voltaire also has embedded deals with Oracle, IBM and NEC, and its products are used in 30% of the Fortune 100, according to a presentation.
Infiniband is part of high-profile products like Oracle's Exadata machines and is used at more than 200 of the world's top supercomputing sites, but at the same time, is facing pressure from Ethernet technologies, which are seen as less expensive and more broadly adopted.
The pending acquisition has implications for Oracle, which recently took a roughly 10% stake in Mellanox. Oracle has no plans to acquire Mellanox, it said at the time.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com