) recently agreed to acquire privately-held Integrity Project. The
transaction is expected to close in the third quarter of 2014.
However, the financial details of the deal were not revealed.
Founded in 2006, Integrity Project is an elite team of
highly-skilled software engineers. The company specializes in
connectivity, real-time applications, low-level development, and
security. Besides the Defense Ministry, some of the other customers
of the company include
), Motorola, HTC and others.
Mellanox has been putting its InfiniBand architecture to use in
developing the next generation of networking equipment called
CloudX. Integration of the aforesaid with the existing networks
will require enormous knowledge of network protocols.
This is where Integrity Project's experienced personnel will come
into play. It is expected that they will help Mellanox in
developing software which could enable cloud data centers to run
applications more rapidly and efficiently.
The acquired solutions will also enable its customers to achieve
optimal performance from all interconnect components, thereby
driving customer base and growth of the company, going forward.
We believe that the acquisition will not only help Mellanox to
deliver end-to-end optical interconnect solutions but also position
it well against competitors including the likes of
Mellanox reported dismal fourth-quarter results and also provided a
tepid guidance. However, we believe that Mellanox's product
offerings such as InfiniBand products and Ethernet solutions will
drive top-line growth, going forward. Moreover, its association
with multiple partners in the ecosystem is likely to add to its
cloud solutions and customer base.
However, sluggish macroeconomic growth and customer concentration
are major headwinds going forward.
Currently, Mellanox has a Zacks Rank #3 (Hold).
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