Israeli networking and data infrastructure provider Silicom Ltd. (Nasdaq:SILC; TASE:SILC) is to acquire ADI Engineering, a privately-held, US-based provider of high performance Intel-based products targeted at the SDN, NFV, IoT, cloud computing and virtualization markets.
Under the terms of the agreement, Kfar Saba-based Silicom will pay ADI’s shareholders $10 million in cash at closing, and an additional consideration subject to certain future performance milestones. The transaction has been approved by the Boards of Directors of both companies and is subject to customary closing conditions. The transaction is expected to close in the fourth quarter of 2015. Silicom expects the acquisition to be accretive to earnings per share on a non-GAAP basis.
Silicom president and CEO Shaike Orbach said, “We are excited to bring ADI’s capabilities into the Silicom portfolio, a strategic move that will enhance our technology, extend our product lines, expand our Total Addressable Market (TAM) and diversify our customer base."
He added, “We intend to continue building out ADI’s existing profitable business while also incorporating its offering into Silicom’s portfolio for our existing customers. The acquisition will also enable us to address Cloud-related providers of CPE/branch office equipment, NFV edge products suppliers and more. In addition, we intend to work together with ADI’s talented development staff to create new products needed by Cloud, NFV and SDN players to keep up with the challenges presented by the rapid growth of data traffic.”
ADI’s products and core technologies are highly complementary with Silicom’s and do not compete with them. ADI implements highly innovative networking, telecom, and embedded solutions using the latest Intel technologies that enable new applications to be brought to market quickly. Since ADI frequently develops reference designs for upcoming Intel technologies, ADI can leverage its deep technical expertise and early access into a time-to-market edge over the competition.
After the acquisition, ADI CEO and founder Steve Yates will join Silicom as ADI Engineering division president.
Orbach said, “We believe this acquisition will strengthen our leadership position in the network appliances industry while expanding our technology and products for the fast-growing Cloud market.”
Yigal Arnon & Co acted as Silicom’s legal counsel for the deal.
Published by Globes [online], Israel business news - www.globes-online.com - on October 1, 2015
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