NVDA NVIDIA Corporation

By Kimberly Chin 

Nvidia Corp. agreed to buy computer-networking supplier Mellanox Technologies Ltd. in an all-cash deal valued at roughly $7 billion.

Nvidia would pay Mellanox shareholders $125 a share, or a 15% premium to Mellanox's closing price of $109.38 Friday.

Nvidia's shares fell 0.13% in premarket trading. Mellanox's shares climbed 8.8%.

The Santa Clara, Calif., company said its high-powered chips combined with Mellanox's high-speed internet connections would help the company respond to the increasing adoption of high-performance computing spurred by artificial intelligence, scientific computing and data analytics.

Mellanox is known for pioneering the InfiniBand interconnect technology, commonly seen in supercomputers, as well as high-speed Ethernet products.

The companies are familiar with each other, Nvidia said. They worked together on building the world's two fastest supercomputers operated by the U.S. Department of Energy.

Nvidia said it expects the deal to have an immediate boost to adjusted earnings, margins and free cash flow.

The deal is slated to close at the end of 2019.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

March 11, 2019 07:58 ET (11:58 GMT)

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