Chip firm Cavium has snapped up QLogic, a semiconductor firm specialising in server and storage networking, to drive further into the data centre market.
Cavium has entered into a definitive agreement to acquire all outstanding QLogic common stock in a deal worth approximately $1.36bn. The acquisition has been unanimously approved by the boards of both companies.
Cavium said that QLogic's portfolio of advanced connectivity and storage solutions is complementary to Cavium's own portfolio of networking, compute and security products.
The acquisition will put Cavium in a better position to offer a complete end-to-end solution to customers across the enterprise, cloud, data centre, storage, telecoms and networking sectors.
"QLogic's industry-leading products extend our market position in the data centre, cloud and storage markets, and further diversifies our revenue and customer base," said Cavium chief executive Syed Ali.
"In addition to the compelling strategic benefits, the manufacturing, sales and operating synergies will create significant value for our shareholders."
In addition, the post-merger organisation will be able to take advantage of greater economies of scale, according to QLogic executive chairman Christine King.
"The scale of operations of a nearly $1bn revenue business will allow the combined company to deliver better solutions for customers. Shareholders will benefit from the immediate premium, as well as the opportunity to participate in the long-term value creation from the combined company's strong growth prospects," King said in a statement.
The deal is also notable because Cavium is a manufacturer of ARM-based server chips, and the firm is hoping to gain a larger foothold in the data centre market. It already counts Lenovo as a customer, which has previously said it is working towards bringing ARM servers to market using Cavium's ARM-based ThunderX system-on-a-chip line-up.
Cavium's latest ThunderX2 family, launched last month, boasts up to 54 cores per chip, and supports up to 3TB of DDR4 memory in a dual-socket system configuration.
It also has integrated 10/25/40/50/100Gbps Ethernet ports and on-chip hardware accelerators for network functions such as traffic shaping, forwarding and quality of service.
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