Aliso Viejo-based QLogic sold for more than $1 billion.
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Jean Hu, Senior Vice-President, Chief Financial Officer and acting Chief Executive Officer of QLogic, an Aliso Viejo-based data storage technology company. COURTESY OF QLOGICAliso Viejo-based QLogic, a networking and storage provider, will be acquired by San Jose-based chipmaker Cavium Inc. for roughly $1.4 billion.
QLogic shares jumped 9 percent at the news Wednesday, closing at $14.80. Cavium shares fell 17 percent to $39.60.
The deal, which has been approved by the boards of both companies, is expected to close in the third quarter of the year.
Cavium is paying $15.50 per stock share – $11 in cash and 0.098 share of Cavium stock. The deal is being funded with $750 million in committed financing, $220 million in balance sheet cash and $400 million in Cavium equity, according to a statement from QLogic.
"QLogic's industry leading products extend our market position in data center, cloud and storage markets, and further diversifies our revenue and customer base," said Syed Ali, president and chief executive officer of Cavium, in a statement. "In addition to the compelling strategic benefits, the manufacturing, sales and operating synergies will create significant value for our shareholders."
The company, which was spun off of Costa Mesa-based Emulex in 1992, has undergone executive shakeup in recent years. In 2013, Simon Biddiscombe resigned as president and CEO in the wake of falling revenue. QLogic's board appointed its chief financial officer, Jean Hu, as interim CEO.
In 2014, the company appointed Prasad Rampalli as CEO, who abruptly quit six months later. Hu returned to the interim post as chief exec, where she remains. That same year, the company's chairman, HK Desai died at age 68 after suffering a heart attack.
The company has built its business on a series of products, including the Fibre Channel Adapters, which allow businesses to store and move huge amounts of data.
QLogic will become a whole owned subsidiary of Cavium. It makes switches, adapter cards and other networking equipment.
Also this week, Sequent Medical Inc., another Aliso Viejo-based company, made headlines after announcing it would be acquired by Terumo Corp. for $280 million.
Contact the writer: hmadans@ocregister.com or Twitter: @HannahMadans
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