Marvell has entered into definitive agreements to purchase Avera Semiconductor, the application specific integrated circuit (ASIC) business of Globalfoundries, according to the companies.

The agreements include transfer of Avera's revenue base, strategic design wins with leading infrastructure OEMs, and a new long-term wafer supply agreement between Globalfoundries and Marvell.

"Our acquisition of Avera enables us to offer the complete spectrum of product architectures spanning standard, semi-custom to full ASIC solutions," said Matt Murphy, president and CEO of Marvell. "With their highly experienced design team and Marvell's leading technology platform, we will be better positioned to capitalize on our expanding opportunity in wired and wireless infrastructure, starting immediately in the fast growing 5G base station market."

"In addition, we are looking forward to furthering our successful partnership with Globalfoundries in the coming years and beyond," Murphy continued.

Under the terms of the agreement, Marvell will pay Globalfoundries US$650 million in cash at closing plus an additional US$90 million in cash if certain business conditions are satisfied within the next 15 months. The transaction is expected to close by the end of Marvell's fiscal-year 2020 pending receipt of regulatory approvals and other customary closing conditions.

The acquisition is expected to be accretive to Marvell's non-GAAP earnings per share in the first full year following the close.

"This transaction is another example of our commitment to focus on our core business of providing differentiated foundry offerings as a manufacturing service provider, while establishing deeper relationships with customers who are leaders in their respective sectors," said Tom Caulfield, CEO at Globalfoundries. "With this deal and our growing strategic partnership with Marvell, we will forge new opportunities for the teams of both companies to leverage GF's broad set of offerings to capitalize on the 5G infrastructure market as well as other opportunities."

Previously part of IBM's microelectronics business, Avera has successfully executed more than 2,000 complex designs in its 25-year history and built a significant business supported by approximately 800 talented technologists.

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