Helix Investment Research
Wed, Jun. 15, 4:17 PM
- Cavium (NASDAQ:CAVM) is buying server/storage connectivity hardware and chip provider QLogic (NASDAQ:QLGC) for an equity value of $1.36B, or an enterprise value of $1B after factoring QLogic's $355M cash balance. The buyout price is equal to $15.50/share, a 14% premium to QLogic's Wednesday close.
- Cavium is paying $11/share in cash and issuing 0.098 shares for each QLogic share. The deal is expected to close in Q3.
- Cavium: "QLogic's leading portfolio of advanced connectivity and storage solutions is highly complementary to Cavium's extensive portfolio of networking, compute, and security solutions. The combination enables Cavium to offer a complete end-to-end offering to customers in Enterprise, Cloud, Data Center, Storage, Telco and Networking markets."
- The deal is expected to boost Cavium's 2017 EPS by $0.60-$0.70, and to yield $45M/year in cost synergies by the end of 2017.
- QLGC +12.3% after hours. Investors could be betting a higher offer will arrive.
- Update (6:38PM ET): Cavium is down 7.3% after hours.
Feb. 25, 2015, 4:48 PM
- In tandem with its FQ1 results, Avago (NASDAQ:AVGO) announces it's buying Fibre Channel/Ethernet connectivity hardware maker Emulex (NYSE:ELX) for $609M net of cash and debt, or $8/share. The price represents a 26% premium to Emulex's Wednesday close.
- The deal is expected to be funded with cash on hand, and to close in the second half of Avago's FY15 (ends Nov. 1). It's expected to be immediately accretive.
- Avago is less than a year removed from buying LSI, whose product line includes RAID storage controllers, storage adapter cards, hard drive SoCs, and network processors. Much of Emulex's product line, which includes Fibre Channel and Ethernet adapter cards, Ethernet and storage controllers, and network monitoring hardware, is complementary to LSI's and/or services the same hardware OEMs.
- Avago is up 5.3% AH to $118.64 following the acquisition news, its FQ1 EPS beat, and strong FQ2 revenue guidance. Emulex is up 24.8% to $7.94. Emulex archrival QLogic (NASDAQ:QLGC) is up 4% to $15.16.
Jan. 17, 2014, 4:12 PM
- QLogic (QLGC -2.2%) and Brocade Communications (BRCD -0.9%) enter into a strategic alliance to jointly develop Fibre Channel tech, align on product plans, and market SAN solutions.
- In conjunction, QLogic has acquired Brocade's Fibre Channel and converged network adapter business. Terms were undisclosed - the acquisition is not expected to materially affect either company's operating results.
- QLogic PR, Brocade PR
Sep. 16, 2013, 2:37 PM
- Starboard, which disclosed a position in Emulex (ELX +5.2%) in July, has issued a letter criticizing the storage adapter card/switch vendor's recent performance, arguing shares are undervalued due to "poor capital allocation decisions," and calling for a board shakeup.
- The firm asserts Emulex's core Fibre Channel adapter card (HBA) business remains "a valuable asset that will continue to generate strong cash flow for years to come," thanks in part to the duopoly Emulex has in this space in tandem with QLogic (QLGC +1.1%). Starboard is also a fan of Emulex's 10-gig Ethernet and Fibre Channel over Ethernet hardware ops.
- Starboard now has a 7.9% stake in Emulex, up from 6.9% in July.
- Bloomberg reported in July Emulex had hired Goldman to help find a buyer. The company saw a management shakeup two weeks later.
Jul. 3, 2013, 10:37 AM
Emulex (ELX +14.6%) soars after Bloomberg reports the company has hired Goldman to help find a buyer. Activist investors Elliott Associates and Atlai Capital have been prodding the storage adapter card/switch vendor to sell itself. Archrival QLogic (QLGC +4.7%) has also jumped on the report. Both companies have been struggling to cope with weak server demand.| Jul. 3, 2013, 10:37 AM | 2 Comments
Jan. 23, 2012, 9:37 AM
QLogic (QLGC -0.1%) is selling its InfiniBand adapter card and switch business to Intel (INTC) for $125M in cash. The move allows QLogic to focus on its core Fibre Channel and FCoE storage networking businesses, and is the latest in a series of moves made by Intel to bolster its networking offerings (previously). InfiniBand chipmaker Mellanox (MLNX -5.4%) is selling off on the news.| Jan. 23, 2012, 9:37 AM