InifiniBand switch maker Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) shares jumped 12.9% in after-hours trading after computer giant Oracle said that it had bought a 10.2% stake in Mellanox.
Mellanox said that Oracle has acquired 10.2% of Mellanox's ordinary shares in the open market "in recognition of the importance of InfiniBand and Mellanox" to Oracle. Oracle said that the stake is for investment purposes only, to solidify common interest in the future of InfiniBand., and that it has no plan or intention to make an unsolicited and unfriendly offer to take over Mellanox.
Oracle CEO Larry Ellison said, "Mellanox has been instrumental in maintaining InfiniBand's immense competitive lead over Ethernet. We are a big supporter of the company and this investment based upon our belief in the InfiniBand technology and in the Mellanox management team."
Rumors of Mellanox as an acquisition target have moved through the markets for a long time, and mentions of potential buyers included Oracle.
Mellanox has reported third quarter revenue of $37.8 million, slightly above market estimates of about $37-37.5 million.
Mellanox said it is expects to continue to work with technology vendors, in addition to Oracle, such as Dell, HP, IBM, and others, to maximize the usage of InfiniBand as the preferred data center communications fabric.
Mellanox CEO Eyal Waldman said, "Mellanox has had a long standing relationship with Sun, and now Oracle, that goes back over eight years. We are pleased that Oracle has chosen to make this strategic investment."