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Cavium Networks Acquires MontaVista Software for $50 Million

Strategic Insights

— 1 min read

Cavium Networks, a leading supplier of specialty ARM and MIPS processors, has acquired MontaVista Software, a pioneer in embedded Linux development, for $50 million. The deal is structured with Cavium contributing $16 million in cash, while the remaining $34 million will be in stock. MontaVista, founded just over a decade ago, has received significant funding from top-tier investors and prominent industry players, including Siemens, IBM, Sony, NEC, and Intel, with a total of at least $93 million in investments.

Key Takeaways:

  • Cavium Networks is acquiring MontaVista Software, a company that provides embedded Linux products, virtualization skills, development tools, professional services, and has a string of Tier-1 customers, including Cisco, Dell, HP, and NTT DoCoMo.
  • The acquisition is valued at $50 million, with Cavium contributing $16 million in cash and the remaining $34 million in stock.
  • MontaVista will continue to operate as a separate operating unit with its own president and brand name, and will retain its engineering, sales, and product management teams.
  • Cavium plans to continue MontaVista's business model, supporting embedded Linux on multiple chip architectures, including ARM and MIPS.
  • The company will monetize design-wins early in the design cycle by selling MontaVista's operating systems, productivity tools, and professional services.
  • MontaVista already supports Cavium's widgets, indicating potential for further integration and revenue growth.
  • Cavium's acquisition of MontaVista marks the second major embedded software acquisition in recent years, following Intel's purchase of Wind River for $884 million in 2009.

Statistics:

  • Cavium Networks has acquired MontaVista Software for $50 million.
  • MontaVista has been funded with at least $93 million since its founding in 2006.
  • Cavium will pay $16 million in cash and contribute $34 million in stock as part of the acquisition.
  • MontaVista has a string of Tier-1 customers, including Cisco, Dell, HP, Motorola, Alcatel-Lucent, and NTT DoCoMo.
  • Cavium's acquisition of MontaVista is expected to be accretive to non-GAAP earnings in 2024.
  • The deal is expected to close next month and will see MontaVista operate as a separate operating unit with its own president and brand name.

Sources:

  • [Cavium Networks Acquires MontaVista Software for $50 Million](https://www.lightreading.com/velocys/velocys-agrees-to-acquire-montavista-software-for-$50-million/d/d-id/717314)
  • [MontaVista Software - About Us](https://www.mvista.com/about-us/)
  • [Intel Agrees to Buy Wind River for $884 Million](https://www.bloomberg.com/news/articles/2009-03-25/intel-agrees-to-buy-wind-river-for-884-million)

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