News & Insights for the AI journey|Monday, March 18, 2019
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Mellanox Hires New CFO Amid Microsoft Acquisition Rumors 

Amid pre-holiday media speculation that Mellanox could be a Microsoft acquisition target, the networking powerhouse has announced that Doug Ahrens, formerly of GlobalLogic, has been named chief financial officer and SVP. Mellanox said Ahrens will manage worldwide financial operations and strategy, including planning and analysis, accounting, compliance, financial reporting and investor relations.

Ahrens had been CFO at GlobalLogic, a 13,000-employee digital product engineering services company based in San Jose. While observers of the potential Mellanox acquisition noted that new CFOs are sometimes hired to prepare a company for sale, last May, GlobalLogic was acquired by Partners Group and the Canada Pension Plan Investment Board for more than $2 billion - a role in which Ahrens highlights in his LinkedIn profile.

Previously, Ahrens served as CFO of Applied Micro Circuits, as well as in financial management positions at Intel and Maxim, a semiconductor company.

Mellanox CFO Doug Ahrens

Reports of the potential acquisition first surfaced on December 19 in the Israeli financial publication TheMarker. Microsoft has reportedly gone so far as to engage Goldman Sachs to handle negotiations with Mellanox. The maker of InfiniBand and Ethernet interconnect and other equipment for servers and storage reported record revenues of $279.2 million for the quarter ended Sept. 30, a YoY increase of 24 percent. Profits for the quarter were $37 million, up from $3 million in 2017.

“I am pleased to have Doug join Mellanox as our CFO to further strengthen our leadership team,” said Eyal Waldman, Mellanox Technologies president and CEO. “Doug brings more than 20 years of semiconductor and technology industry experience, which along with his extensive financial leadership in both publicly and privately held companies make him ideally suited to lead our continued financial growth and profitability.”

Mellanox said Eric Johnson, who acted as Mellanox’s interim principal financial and accounting officer, will continue as vice president and corporate controller.

TheMarker’s story reported that Microsoft is a major customer of Mellanox’s “and sees an acquisition as a way to strengthen its services in cloud computing as it competes with the likes of Amazon and Google.”

But Microsoft may not be Mellanox’s only suitor. London-based DatacenterDynamics reported that FPGA chip maker Xilinx, along with Intel and Broadcom, also could be interested in acquiring the company.

In November, CNBC reported that Xilinx was working with Barclays on a purchase priced at $100/share, or about $5 billion.
Rumors of a Mellanox sale extend to at least November 2017, when the Wall Street Journal reported that activist investor Starboard Value acquired a 10.7 percent stake in Mellanox, and pressured the company to better its financial position and explore a potential sale.

Israel-based Mellanox was founded in 1999 by former Intel and Galileo Technology executives and went public in 2007. With nearly 3,000 employees, Mellanox equipment is used in more than half of the world's publicly-listed fastest computers.

Mellanox will host its fourth quarter 2018 financial results conference call on Wednesday, Jan. 30, at 2 p.m. Pacific Time. The company said both Waldman and Ahrens will participate on this call to discuss the company’s financial results.

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