
American tech giant Nvidia signed a deal Monday to purchase Israeli data connectivity company Mellanox Technologies for just shy of $7 billion.
The Santa Clara, California-based Nvidia, perhaps best known for its graphics processing units used in many home computers and laptops, agreed to pay $6.8 billion in cash for Mellanox, which is based in Yokneam, in northern Israel, with a US office in Sunnyvale, California.
Mellanox was founded 20 years ago by Eyal Waldman, the company’s current chief executive officer. The company produces hardware for large data center servers, including server centers used to power cloud computing.
A dramatic rise in Mellanox’s stock price in recent months – including a 66% rise since October – has attracted attention from a number of companies interested in purchasing the firm, including Microsoft, Intel, and Xilinx. Nvidia outbid an offer by Intel, giving Mellanox a $125-per share offer – a 14% premium over the company’s value as of the close Friday.
The purchase of Mellanox is Nvidia’s largest-ever acquisition. According to Reuters, the company hopes its acquisition of Mellanox will help it reduce its reliance on the video game industry.