Storage Connectivity Specialist Mellanox Acquires Voltaire for $218M

Storage connectivity specialist Mellanox Technologies, in a move to add Infiniband to its catalog of products for the high-performance data center market, Nov. 29 announced the acquisition of high-end switch maker Voltaire for $218 million in cash, or $8.75 per stock share.

Mellanox President and CEO Eyal Waldman said he expects the transaction to close in the first quarter of 2011.

Thirteen-year-old Voltaire, based in Ra'anana, Israel, with U.S. headquarters in Chelmsford, Mass., makes both Infiniband and 10G-bit Ethernet switches for high-performance and cloud computing environments.

Mellanox, with headquarters in both Yokneam, Israel, and Sunnyvale, Calif., said it is adding Voltaire to expand its customer base and to upgrade its overall product line.

Gartner Research has reported that worldwide server shipments are expected to increase from 9 million in 2010 to 11.2 million by 2014, and that worldwide storage systems are expected to grow from approximately 1.8 million in 2010 to 3.2 million in 2014.

Less than 10 percent of that market, however, is based on high-end Infiniband wired connectivity, largely because it is far more expensive than conventional Fibre Channel or Ethernet data center fabrics.

Infiniband, however, has become the standard interconnect for high-performance computing (HPC) environments, such as scientific labs and oil and gas exploration deployments, and is gradually becoming more commonly deployed in enterprise data centers that require a high-performance fabric.

Following the merger, the combined businesses will have about 700 employees and an annual revenue of $217 million.

Mellanox, founded in 1999, expects to run the newly combined business from both companies' current offices located in Israel. The company also said it will retain Voltaire's existing product line and will converge it with its own for future product generations to ensure continuity for customers and partners of both companies.

Ronnie Kenneth, chairman and CEO of Voltaire, will join the Mellanox board of directors, Waldman said.