Marvell Tech to acquire Innovium for $1.1bn

Marvell Technology is to acquire the chip startup Innovium for $1.1 bn in a move that’s intended to bolster Marvell’s share of networking chips sold to large cloud-computing companies.

Last year Marvell acquired Inphi in a deal worth in excess of $10bn. Inphi produces chips that connect switches with fibre optic cables that help move digital information around inside data centres.

Innovium’s chip sits at the heart of these switches and, according to an interview with Reuters, Marvell Chief Executive Matt Murphy said the company’s long-term plan was to integrate the Innovium and Inphi products to deepen its ties with cloud computing vendors, which are some of the largest spenders in the world on chips.

Innovium’s TERALYNXTM switching architecture delivers ultra-low latency, optimised power, high performance, and innovative telemetry that are all critical in modern cloud-scale data centres.

The company has steadily grown to become a strong supplier in the merchant cloud Semiconductor switching market and the planned acquisition will allow Marvell to participate in this fast growing segment of the switch market with a cloud-optimised solution.

Privately held, Innovium is forecast to generate $150m in revenues in its next fiscal year. Under the terms of the deal, Marvell will pay $1.1bn in stock but take on $145m in cash from Innovium’s balance sheet, resulting in a net cost to Marvell of $955 million.