Monday, November 9, 2009

Cavium to Acquire MontaVista Software for Embedded Linux

Cavium Networks agreed to acquire MontaVista Software for $50 million, comprised of $16 million in cash and $34 million in Cavium Networks common stock.

MontaVista Software supplies multi-core embedded Linux operating systems, virtualization, development tools and professional services to a broad array of Tier-1 customers. The company's Carrier Grade Linux is embedded in telecom gear from companies that include Alcatel-Lucent, Cisco, Ericsson, Fujitsu, NEC, Nokia-Siemens, NTT, Motorola, Samsung and others. MontaVista's embedded Linux market segment also includes Tier-1 CE manufactures such as Sony, Samsung and Philips; MID and Mobile vendors such as NEC and Garmin; Industrial Automation vendors such as HP, Kyocera-Mita and Fuji Xerox and leading Automotive infotainment suppliers.

"Software is becoming an increasingly important part of the total solution with the rapidly increasing adoption of multi-core processors.", said Syed Ali, President and CEO of Cavium Networks. "This acquisition will complement Cavium's market leading processor portfolio with world-class software expertise and will enable us to deliver highly compelling and differentiated solutions to the market."

After the acquisition, MontaVista Software will run as a separate operating unit and will retain the MontaVista brand name. In addition, Cavium Networks will continue the MontaVista business model and support embedded Linux on multiple architectures from multiple processor vendors. MontaVista will maintain its own dedicated and focused engineering, sales and product management staff. The deal is expected to close in December 2009. Cavium expects the deal will be gross margin and non-GAAP earnings accretive in 2010 and beyond.

  • In June 2009, Intel agreed to acquire Wind River Systems, a leading supplier of software for embedded processors, for $11.50 per share in cash, or approximately $884 million in the aggregate. Wind River's main products include its VxWorks, a proprietary and multicore-ready real-time operating system, and commercial-grade Linux software platforms. The company also provides design services and software expertise, including custom-built solutions, development tools and device testing products.

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