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Qlogic pops, Cavium slides after $1.36 billion deal

Melee | Wikimedia Commons

Cavium Networks shares plunged more than 17 percent Thursday after the company said it would acquire QLogic, a cloud solutions maker, which rallied more than 9 percent.

The semiconductor maker announced would buy QLogic for $1.36 billion, or $15.50 a share, to boost growth in its data and storage markets. QLogic is known for fibre channels adapters, which are used in cloud-storage technology.

"QLogic's industry leading products extend our market position in data center, cloud and storage markets, and further diversifies our revenue and customer base. In addition to the compelling strategic benefits, the manufacturing, sales and operating synergies will create significant value for our shareholders," said Syed Ali, Cavium president and CEO in a release.

"QLogic with Cavium is a winning combination for customers and employees and is financially compelling for QLogic shareholders," said Christine King, executive chairman at QLogic.

Cavium shares have lost 39 percent so far this year, while QLogic has surged 21 percent in the same period.

Cavium (blue) and QLogic (green) year-to-dateSource: FactSet