NED alumnus sells company to chip-maker Marvell for $6bnPakistan
Cavium, co-founded by Pakistani-American Raghib Hussain, has been acquired by chip-maker Marvell in a $6 billion deal in cash and stock.
Hussain is an alumnus of NED University of Engineering Technology (NEDUET), Karachi, who started Cavium with his friend Syed B. Ali. The company was taken public at a market value of $600 million in 2007.
In an email sent to his friends on Nov 23, Hussain said:
"Now that the news is public, you must have figured out why I was so busy lately. It’s a day with mixed feelings for me. It’s like sending [a] 17-year-old off to college. In any case, I’m thankful to God for giving us the opportunity to experience this.
"To summarise: I started Cavium with Syed in late 2000, took it public in 2007 with a market cap of about $600m. Ten years later in 2017, we are an established semiconductor company with revenue of $1bn, 2,000 employees and a market cap of $5bn, now consolidated for over $6.5bn enterprise value. At the market close on Wednesday, the deal already valued at $7.5bn (enterprise value). I am thankful for everyone’s prayers and support."
Marvell’s main business is to make chips that are used in hard disk drives. However, as the market for hard disks is slowly declining due to new technologies, Marvell made a move to expand its business.
Cavium makes networking processors and the company is planning to use Acorn RISC Machine's designs to break into the server microprocessor business.
Marvell said it will acquire all outstanding shares of Cavium common stock in exchange for consideration of $40 per share in cash and 2.1757 Marvell common shares for each Cavium share. Marvell plans to use $1.75bn in debt financing to fund the transaction.
Cavium stockholders will hold 25 per cent of the combined company shares. Marvell Technology will now be able to compete with chip-making giants like Intel.
Marvell CEO Matt Murphy will lead the company and the Cavium co-founder and CEO Syed Ali will serve as strategic advisers and board members.
This article originally appeared on ProPakistani and has been reproduced with permission.