Mellanox Technologies announced Monday that it will acquire Voltaire for $218 million in a move that brings together two connectivity heavyweights serving data center servers and cloud computing IT enterprise environments.

The deal had immediate repercussions on the firms' stocks, as Voltaire's jumped nearly 35% and Mellanox's dipped 4% in early trading following the announcement.

The two firms provide a variety of data center connectivity solutions in linking servers, storage solutions, fabric switches, and related software. Both firms have major offices in the United States and Israel. Mellanox said it plans to operate the combined businesses from current offices in Israel and the United States.

"The combination of Mellanox and Voltaire will create a leading provider of connectivity solutions for our customers by leveraging the complementary strengths of our companies," said Eyal Waldman, president, chairman, and CEO of Mellanox, in a statement. "Together, we believe the combined company will be a stronger business partner and system solutions provider, delivering customers a comprehensive range of end-to-end connectivity solutions."

Mellanox said the directors of both companies have approved the acquisition, which is expected to become final in the first quarter of 2011 after reviews by regulatory agencies.

Mellanox said it expects to retain the existing product lines of both firms and to converge the lines in future product generations. Mellanox recorded nearly $150 million in revenue, and Voltaire $67.7 million in revenue, over the last 12 months (LTM). Both firms have produced InfiniBand offerings and they both share a lineup consisting of major Fortune 100 firms. Between them, Mellanox and Voltaire have about 700 employees.

Voltaire CEO Ronnie Kenneth is slated to join Mellanox's board of directors. Long a pacesetter in Infiniband, Voltaire has recently stepped up its Ethernet presence in situations in which it believes it will buttress Mellanox's longtime strength in server and storage connectivity.

For Further Reading

Mellanox Unveils Advanced Adapter Cards For Dell Blades

Interop: 10 Gigabit Ethernet Advances Into Data Centers

Voltaire Intros 40 Gigabit Switch