MAGNOLIA

Mellanox Technologies Ltd. which develops semiconductor solutions for the communications, server, and data storage markets, has come one step closer to an IPO on Nasdaq after it announced last Thursday that it filed a draft prospectus with the US Securities and Exchange Commission (SEC). The draft prospectus stated that the company would raise up to $86.3 million, but this did not include an offer for sale.

Mellanox did not give details in the prospectus about the specific structure of the flotation or the company value, but based on the sum to be raised, it will probably have a value of $300=350 million. Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. will act as joint book-running managers for the offering, with Thomas Weisel Partners LLC and Jefferies & Company, Inc. acting as co-managers. If all goes according to plan, Mellanox will be listed for trading under the ticker MLNX.

The draft prospectus reveals that Mellanox posted a net profit of $550,000 on $19.3 million revenue in the first half of 2006, compared with a net loss of $250,000 on $17.7 million revenue in the first half of 2005. The company currently has $13 million in cash. Mellanox develops communications products for boosting data transmission between computer components. The company’s product suite is based on Infiniband technology - a switched communications link primarily used in high-performance computing. Mellanox offers switches with a capacity of 60 gigabits per second over one cable. Experts predict that the Infiniband technology will be one of the catalysts in the replacement of aging mainframe systems.

Mellanox’s draft prospectus reveals that Sequoia Capital owns 13.6% of the company, with US Venture Partners holding a similar stake, and founder, chairman and CEO Eyal Waldman owning around 19%.

Published by Globes [online], Israel business news - www.globes.co.il - on October 3, 2006

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