SANTA CLARA, Calif. and
SAN JOSE, Calif., May 6, 2019 /PRNewswire/ -- Marvell Technology
Group Ltd. (NASDAQ: MRVL), a leader in infrastructure semiconductor
solutions, and Aquantia, Corp. (NYSE: AQ), a leader in Multi-Gig
Ethernet connectivity, today announced a definitive agreement,
approved by the boards of directors of both companies, under which
Marvell will acquire all outstanding shares of Aquantia common
stock in exchange for consideration of $13.25 per share in cash.
The acquisition of Aquantia complements Marvell's portfolio of
copper and optical physical layer product offerings and extends its
position in the Multi-Gig 2.5G/5G/10G Ethernet segments. In
particular, Aquantia's innovative Multi-gig automotive PHYs,
coupled with Marvell's industry-leading gigabit PHY and secure
switch products, creates the broadest and most advanced range of
high-speed in-car networking solutions in the world. This
unique combination accelerates Marvell's vision for the future of
automotive networking with speeds necessary to enable level 4 and 5
autonomous driving.
As the automotive industry increasingly adopts Ethernet
in-vehicle networks for mainstream models, the number of related
ports is expected to grow dramatically at a 62% annualized growth
trajectory, from 53 million in 2018 to 367 million by
20221.
"Our acquisition of Aquantia will fuel Marvell's leadership in
the transformation of the in-car network to high-speed Ethernet
over the next decade," said Matt
Murphy, president and CEO of Marvell. "At the same
time, Aquantia extends our reach in the rapidly emerging Multi-Gig
segment of network infrastructure and creates a leading end-to-end
Ethernet connectivity portfolio."
"Marvell and Aquantia share a vision where the network – whether
in an autonomous vehicle, an enterprise application or in cloud
infrastructure – can seamlessly power the data economy," said
Faraj Aalaei, chairman and CEO of
Aquantia. "This is a fantastic opportunity as our customers will
benefit from Marvell's global scale and expanding footprint in
Multi-Gig network applications."
The transaction is expected to be immediately accretive to
Marvell's non-GAAP earnings per share and generate significant
annual run-rate synergies of $40
million to be realized within 12 months after the
transaction closes.
1Source: Strategy Analytics
Transaction Structure and Terms
Under the terms of the definitive agreement, Marvell will pay
Aquantia's stockholders $13.25 per
share in cash. This represents approximately $452 million in transaction value after adjusting
for net cash on Aquantia's balance sheet. Marvell intends to
finance the transaction with cash on hand and revolver
borrowings. The transaction is not subject to any financing
condition and is expected to close by the end of CY2019, subject to
regulatory approval as well as other customary closing conditions,
including the adoption by Aquantia's stockholders of the merger
agreement.
In connection with the execution of the definitive agreement,
certain stockholders of Aquantia, together holding approximately 17
percent of the outstanding shares of common stock of Aquantia, have
agreed to vote their shares in favor of the transaction under a
voting and support agreement.
Marvell Preliminary First Fiscal Quarter 2020 Results
Based on preliminary financial information, Marvell expects its
first quarter revenue to be in the range of $650 million +/- 3%, the same range as guided on
March 7, 2019. Further
information regarding first fiscal quarter results will be released
on May 30 at 1:45 p.m. Pacific Time. This update is an
estimate, based on information available to management as of the
date of this release, and may be subject to further changes upon
completion of Marvell's standard quarter closing procedures. This
update does not present all necessary information for an
understanding of Marvell's financial condition as of May 4, 2019, or its results of operations for the
quarter ended May 4, 2019.
Call/Webcast to Discuss Transaction
Interested parties may join a conference call Monday, May 6, 2019 at 6:00 a.m. Pacific Time to discuss the transaction
by dialing 1 (844) 647-5488 in the U.S. or +1 (615) 247-0258
internationally, with the conference ID 7355589. A webcast of
the call can be accessed by visiting Marvell's investor relations
website. A replay will be available until Monday, May 13, 2019 by dialing 1 (855) 859-2056,
replay ID 7355589.
Additional Information and Where to Find It
Aquantia intends to file with the Securities and Exchange
Commission (the "SEC") a proxy statement in connection with the
proposed transaction with Marvell. The definitive proxy
statement will be distributed to the stockholders of Aquantia and
will contain important information about the proposed transaction
and related matters. SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE. The
proxy statement and other relevant materials (when they become
available), and any other documents filed by Aquantia with the SEC,
may be obtained free of charge at the SEC's website, at
www.sec.gov. In addition, security holders will be able to
obtain free copies of the proxy statement from Aquantia by
contacting Investor Relations by mail at Aquantia Corp., 91 E.
Tasman Dr. Suite 100, San Jose, CA
95134, Attn: Investor Relations Department, or by telephone at
(650) 815-1239.
Participants in the Solicitation
Aquantia and Marvell and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Aquantia stockholders in connection
with the proposed transaction. Information about Aquantia's
directors and executive officers in the proposed transaction will
be included in the proxy statement described above.
Information about Marvell's directors and executive officers is set
forth in Marvell's proxy statement for its 2018 Annual Meeting of
Shareholders filed with the SEC on May 28,
2018, Item 5.02 of its Current Report on Form 8-K filed on
July 6, 2018 and its Annual Report on
Form 10-K for the year ended February 2,
2019, filed on March 28, 2019.
These documents are available free of charge at the SEC's web
site at www.sec.gov and by going to Aquantia's Investor Relations
page on its corporate web site at www.Aquantia.com or by going to
Marvell's Investor Relations page on its corporate web site at
www.marvell.com.
About Marvell
Marvell first revolutionized the digital storage industry by
moving information at speeds never thought possible.
Today, that same breakthrough innovation remains at the heart of
the company's storage, processing, networking, security and
connectivity solutions. With leading intellectual property
and deep system-level knowledge, Marvell's semiconductor solutions
continue to transform the enterprise, cloud, automotive, industrial
and consumer markets. To learn more, visit:
https://www.marvell.com.
Marvell and the M logo are registered trademarks of Marvell
and/or its affiliates in the US and/or elsewhere. Other names and
brands may be claimed as the property of others.
About Aquantia
Aquantia is a leader in the design, development and marketing of
advanced, high-speed communications ICs for Ethernet connectivity
in the Data Center, Enterprise Infrastructure, Access and
Automotive markets. Aquantia's products are designed to
cost-effectively deliver leading-edge data speeds for use in the
latest generation of communications infrastructure to alleviate
network bandwidth bottlenecks caused by the growth of global IP
traffic. Aquantia is located in Silicon Valley. To learn
more, visit: www.Aquantia.com.
(AQ-INV)
Cautionary Statement Regarding Forward Looking
Statements
This document contains certain forward-looking statements within
the meaning of the federal securities laws with respect to the
proposed transaction between Marvell and Aquantia, including
statements regarding the benefits of the transaction and expected
synergies, the anticipated timing of the transaction and the
products and markets of each company and statements regarding
Marvell's expectations regarding its first quarter of fiscal 2020
revenue outlook. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result," and similar expressions.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this press
release, including but not limited to: (i) the risk that the
transaction may not be completed in a timely manner or at all, (ii)
the failure to satisfy the conditions to the consummation of the
transaction, including the adoption of the merger agreement by the
stockholders of Aquantia and the receipt of certain governmental
and regulatory approvals, (iii) the occurrence of any event, change
or other circumstance that could give rise to the termination of
the merger agreement, (iv) the effect of the announcement or
pendency of the transaction on Aquantia's business relationships,
operating results, and business generally, (v) risks that the
proposed transaction disrupts current plans and operations of
Aquantia or Marvell and potential difficulties in Aquantia employee
retention as a result of the transaction, (vi) risks related to
diverting management's attention from Aquantia's ongoing business
operations, (vii) the outcome of any legal proceedings that may be
instituted against Marvell or against Aquantia related to the
merger agreement or the transaction, (viii) the ability of Marvell
to successfully integrate Aquantia's operations and product lines,
(ix) the ability of Marvell to implement its plans, forecasts, and
other expectations with respect to Aquantia's business after the
completion of the proposed transaction and realize the anticipated
synergies and cost savings in the time frame anticipated or at all,
(x) the risk of downturns in the highly cyclical semiconductor
industry, and (xi) Marvell's or Aquantia's failure to achieve
expected revenues and forecasted demand from customers. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties that affect the businesses of Marvell and Aquantia
described in the "Risk Factors" section of their respective Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and other
documents filed by either of them from time to time with the SEC.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Marvell and Aquantia assume no obligation and do
not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise. Neither Marvell nor Aquantia gives any assurance that
either Marvell or Aquantia will achieve its expectations.
Investor Contacts:
Marvell Investor Relations:
Ashish Saran
408-222-0777
ir@marvell.com
Aquantia Corporate Communications:
Diane Vanasse
408-242-0027
diane.vanasse@aquantia.com
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SOURCE Marvell Technology Group Ltd.