Marvell Technology Group Ltd. (NASDAQ: MRVL) shares dipped on Monday after the company announced that it would be acquiring Aquantia Corp. (NYSE: AQ).
Under the terms of the agreement, Marvell will be acquiring Aquantia for $13.25 per share in an all-cash agreement.
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.
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 2022.
The transaction is expected to be immediately accretive to Marvell and generate significant annual run-rate synergies of $40 million to be realized within 12 months after the transaction closes.
Matt Murphy, president and CEO of Marvell, commented:
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. … 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.
Shares of Marvell were last seen down about 2% at $24.12, in a 52-week range of $14.34 to $25.74. The stock has a consensus price target of $25.41.
Aquantia was up about 36% at $12.99 per share. The 52-week range is $7.08 to $14.00, and the consensus price target is $12.33.