Marvell to buy Aquantia to bolster in-car Ethernet

May 06, 2019 //By Peter Clarke
Marvell to buy Aquantia to bolster in-car Ethernet
Networking and communications IC supplier Marvell Technology Group Ltd. (Santa Clara, Calif.) has agreed to buy loss-making Aquantia Corp. (San Jose, Calif.) for $452 million after adjusting for cash on Aquantia's balance sheet.

Aquantia is a manufacturer of high-speed transceivers including Ethernet ICs. The acquisition has been agreed by the boards of directors of both companies but awaits shareholder adoption at Aquantia and other regulatory approvals.

Aquantia is a leader in multi-gig Ethernet and the acquisition will complement Marvell's portfolio of copper and optical physical layer product offerings and extends its position in the 2.5G/5G/10G Ethernet segments, Marvell said in a statement. Aquantia's automotive PHYs, coupled with Marvell's gigabit PHY and secure switch products, creates a range of high-speed in-car networking solutions, Marvell added.

The number of in-vehicle Ethernet ports is projected to sustain a compound annual growth rate of 62 percent from 53 million in 2018 to 367 million in 2022, according to data from Strategic Analytics.

"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, CEO of Marvell, in the same statement. "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 said it intends to finance the deal with cash on hand and existing loan arrangements. The deal is expected to close by the end of the calendar year.

Aquantia made a net loss of $13.1 million on revenues of $17.0 million in the first quarter of 2019. The revenue was down 40 percent year-over-year. The company had cash, cash equivalents and short-term investments of $62.4 million as at March 31, 2019. This was due to push outs by a number of customers, Aquantia said its in 1Q19 earnings statement.

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