SAN JOSE, Calif., July 30, 2014 /PRNewswire/ -- Cavium, Inc., (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, service provider wired and wireless networking, today announced a definitive agreement to acquire Xpliant, Inc., a privately held company headquartered in San Jose, California. Xpliant is a provider of high performance, high density switch silicon targeting a broad range of switching applications for the data center, cloud, service provider and enterprise markets.
The total acquisition cost is projected to be approximately $90 million, which includes payments to stockholders, note holders and other liabilities and costs. Cavium was an investor in Xpliant having provided $15 million of funding to Xpliant through June 2014, which is included in that total cost estimate. The remaining $75 million will be comprised of approximately $40 million in cash and $35 million in stock.
Xpliant technology and products address the need for increased capacity in both networking infrastructure and data centers driven by the steep growth of mobile applications and social networking. Global mobile data traffic will increase nearly 11-fold between 2013 and 2018 growing at a CAGR of 61%, while cloud data center IP traffic will more than double between 2014 and 2017 growing at a CAGR of 30% according to Cisco's Visual Networking Index and Global Cloud Index.
This expected growth will require increased intelligence and bandwidth within the network switching solution offerings to deliver enormous amounts of data in an efficient manner while controlling power consumption and costs. Furthermore, software-defined networking (SDN) continues to emerge as the architectural implementation of choice for building these networks.