Seeking Alpha

EZchip Semiconductor Limited (EZCH)

  • Tue, Nov. 17, 8:25 AM
    • Four days after EZchip (NASDAQ:EZCH) announced it's postponing a shareholder vote on Mellanox's (NASDAQ:MLNX) planned $25.50/share ($811M) acquisition of the company and has been offered a 30-day go-shop period and termination fee waiver, the company states it has signed off on the revised agreement.
    • Should no superior offer arrive during the go-shop period, EZchip shareholders will vote on the deal at a Jan. 19 meeting (Dec. 18 record date). EZchip sees the deal closing in Q1.
    • With shares having closed yesterday at $24.04, EZchip remains 5.7% below Mellanox's offer price.
    | Tue, Nov. 17, 8:25 AM | 6 Comments
  • Thu, Nov. 12, 10:53 AM
    • Following pressure from activist Raging Capital to get a better deal, EZchip (EZCH +2.6%) has postponed a shareholder vote on Mellanox's (MLNX +0.9%) planned $25.50/share ($811M) acquisition of the company. The vote was set for today's shareholder meeting.
    • In addition, Mellanox has granted EZchip a 30-day go-shop period to solicit alternative bids, and has waived its rights to a deal termination fee.
    • Mellanox is affirming its $25.50/share, all-cash, offer. EZchip has risen to $24.55 on today's news.
    | Thu, Nov. 12, 10:53 AM | 2 Comments
  • Thu, Nov. 5, 3:12 PM
    • Mellanox (MLNX -1.7%) is off moderately after EZchip (EZCH -0.2%), which Mellanox is set to acquire for $811M (provided shareholders approve), posted nearly in-line Q3 results and guided for Q4 revenue of $25M, below a $33.1M consensus. The network processor vendor attributes the outlook to "near-term inventory adjustments across several key customers that are serving the carrier networking space," and insists it isn't reflective of the company's long-term outlook,
    • However, with major shareholder Raging Capital continuing to oppose Mellanox's planned acquisition of EZchip, EZchip is using the guidance to argue in favor of the Mellanox deal. "The fully financed, all-cash, $25.50 per share offer from Mellanox provides EZchip shareholders with immediate and certain cash value. This is in contrast to the headwinds a standalone EZchip could face as we continue to witness further industry consolidation and the moves of major customers toward in-house production for NPS-400 functionality."
    • EZchip has also issued a new PR making a case for a "Yes" vote. Shareholder advisory firm Glass Lewis opposes the deal, while peers ISS and Entropy are in favor of it.
    • Thanks to fears the deal could fall through, EZchip is trading at $24.24, 5% below Mellanox's buyout price.
    • EZchip's Q3 results, PR
    | Thu, Nov. 5, 3:12 PM | 1 Comment
  • Wed, Oct. 14, 2:25 PM
    • In a 13D filing, Raging Capital (6.5% EZchip stake) asserts it's "in the best interest of all stockholders that [EZchip] attempt to negotiate a materially higher sale price with Mellanox (MLNX +0.7%) or other potential acquisition candidates, or refrain from selling the business."
    • Mellanox announced an $811M ($25.50/share) all-cash deal to buy EZchip (EZCH +0.1%) on Sep. 30, and quickly sold off in response. The price represented a 16% premium to EZchip's Sep. 29 close.
    • EZchip currently trades $0.44 below Mellanox's buyout price. The deal is expected to close in Q1.
    | Wed, Oct. 14, 2:25 PM | 5 Comments
  • Wed, Sep. 30, 10:25 AM
    • Mellanox (MLNX -7.3%) has sold off after announcing it's buying network processor (NPU) vendor and Israeli tech peer EZchip (EZCH +14.3%) for $811M in cash. Meanwhile, telecom/data center chipmakers Cavium (CAVM +3.5%), AppliedMicro (AMCC +4.1%), and PMC-Sierra (PMCS +7.9%) are rallying amid a 2% Nasdaq gain - each company's product line includes (but is by no means limited to) NPUs.
    • Whereas Mellanox is focused on high-speed data center connectivity hardware (e.g. adapter cards, switches, switching and adapter ICs), EZchip still gets the majority of its revenue from NPUs going into edge routers and other telecom hardware. However, the company has been trying to expand its data center footprint, via its new NPS processor line (supports deeper packet analysis) and its Tilera unit (acquired in 2014, set to launch a processor supporting 100 ARM cores).
    • Mellanox asserts EZchip's "products and expertise in security, deep packet inspection, video, and storage processing" will help it "deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for advanced data center and [telecom] edge platforms." The purchase price is equal to 5.9x EZchip's 2016 sales consensus; Mellanox trades for just 2.3x 2016E sales.
    • Update: Summit Research's Srini Nandury thinks Mellanox's selloff stems from the company's failure to reiterate Q3 guidance during today's conference call, in spite of repeatedly being asked by analysts to do so.
    | Wed, Sep. 30, 10:25 AM | Comment!
  • Wed, Sep. 30, 7:51 AM
    • The price works out to $25.50 per share in cash for EZchip (NASDAQ:EZCH) versus last night's close of $21.99.
    • "We expect our combined technologies, and product portfolios to deliver leading end-to-end intelligent interconnect and processing solutions to data centers and wide area networks," says Mellanox (NASDAQ:MLNX) CEO Eyal Waldman.
    • The deal is expected to close in Q1.
    • A conference call is set for 8:30 ET.
    • Source: Press Release
    | Wed, Sep. 30, 7:51 AM | Comment!
  • Jul. 1, 2014, 10:03 AM
    • EZchip (EZCH +1.6%) is paying $50M up-front, and up to $80M in performance earn-outs, to buy Tilera. The deal is expected to close in Q3.
    • Tilera's network processors (NPUs) pack dozens of cores that can be programmed to handle tasks well-suited to parallel processing. The company launched a 72-core NPU (offered through a PCIe card) last year, and has been prepping a chip with over 100 cores.
    • Whereas EZchip's NPUs are generally used in edge/access routers within carrier networks, Tilera's are often used in data center networking, security, and video appliances, and also act as co-processors within x86 servers. Tilera's rivals include Intel, Cavium, Broadcom, and Marvell.
    • EZchip declares the deal doubles its addressable market to $2B, and adds 100+ customers. The purchase is expected to be slightly dilutive to 2014 EPS, and accretive to 2015 EPS.
    • Tilera CEO Devesh Garg will become the head of EZchip's U.S. ops. EZchip predicts pairing its strengths with Tilera's will yield "new multi-core CPUs that uniquely integrate powerful networking capabilities with the highest number of processor cores addressing a wide range of applications and market segments."
    | Jul. 1, 2014, 10:03 AM | Comment!
  • Jan. 4, 2012, 7:09 PM
    Marvell (MRVL +1.5%) has acquired Xelerated, a Swedish developer of network processing and Ethernet switching chips for a variety of telecom equipment. Xelerated, cited by Light Reading as a "key specialist" in the nascent market for processors handling 100-gig links, is a direct rival of EZchip (EZCH -1.4%), and also competes with top Marvell competitor Broadcom (BRCM -1.1%).
    | Jan. 4, 2012, 7:09 PM | Comment!
  • Sep. 13, 2011, 1:37 PM
    NetLogic (NETL +0.2%) shares are quiet a day after Broadcom's (BRCM) $3.7B bid, as investor hopes for a higher competing bid fade. But Cavium (CAVM +3.2%) and EZChip (EZCH +6.5%) extend yesterday's speculative surge: JMP thinks CAVM could be a takeover target and the BRCM-NETL combo could add new business (also), and Bloomberg reports Marvell (MRVL) could make a bid for EZCH.
    | Sep. 13, 2011, 1:37 PM | Comment!
Company Description
EZChip Semiconductor Ltd is engaged in the development & marketing of Internet application solutions to improve the connectivity & performance of corporate LAN & WAN.