424B3 1 d451897d424b3.htm FILED PURSUANT TO RULE 424(B)(3) Filed Pursuant to Rule 424(b)(3)
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Filed pusuant to Rule 424(b)(3)
Registration No. 333-222235

 

 

LOGO   

LOGO

PROPOSED MERGER AND SHARE ISSUANCE—YOUR VOTE IS VERY IMPORTANT

Dear Shareholders:

Marvell Technology Group Ltd. (“Marvell”), Kauai Acquisition Corp., an indirect wholly owned subsidiary of Marvell (“Merger Sub”), and Cavium, Inc. (“Cavium”) have entered into an agreement and plan of merger, dated as of November 19, 2017 (the “Merger Agreement”). Merger Sub is a direct wholly owned subsidiary of Marvell Technology, Inc. (“MTI”), which is a direct wholly owned subsidiary of Marvell. Pursuant to the Merger Agreement, Merger Sub will merge with and into Cavium (the “Merger”), with Cavium continuing as the surviving corporation in the Merger and as a direct wholly owned subsidiary of MTI. Upon completion of the Merger, each issued and outstanding share of common stock, par value $0.001 per share, of Cavium, other than any shares owned by Cavium, Marvell, Merger Sub or any of their respective subsidiaries, will be converted into the right to receive 2.1757 Marvell common shares, par value $0.002 per share, and $40.00 in cash.

Immediately following the Merger, Marvell’s shareholders will own approximately 76.7% of Marvell’s issued common shares, and Cavium’s shareholders will own approximately 23.3% of Marvell’s issued common shares, based on the number of Marvell common shares issued and the number of shares of Cavium common stock outstanding as of January 22, 2018. Marvell common shares are listed on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “MRVL.” Cavium common stock is listed on NASDAQ under the symbol “CAVM.” Upon completion of the Merger, Cavium common stock will be delisted from NASDAQ.

The Merger will be a taxable transaction for U.S. federal income tax purposes.

We are each holding a meeting of shareholders in order to obtain the shareholder approvals necessary to complete the Merger. At Cavium’s shareholder meeting, Cavium will ask its shareholders to adopt the Merger Agreement, and at Marvell’s shareholder meeting, Marvell will ask its shareholders to approve the issuance of Marvell common shares in connection with the Merger (the “Marvell Share Issuance”). Adoption of the Merger Agreement by Cavium shareholders is a condition to the completion of the Merger. Approval of the Marvell Share Issuance by Marvell shareholders is a condition to the completion of the Merger. The obligations of Marvell, Merger Sub and Cavium to complete the Merger are also subject to the satisfaction or waiver of several other conditions set forth in the Merger Agreement and described in this joint proxy statement/prospectus. We urge you to read this joint proxy statement/prospectus, and the documents incorporated by reference into this joint proxy statement/prospectus, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 25.

After careful consideration, the board of directors of Marvell has determined that the Merger and the Marvell Share Issuance are fair to, and in the best interests of, Marvell and its shareholders; and the board of directors of Cavium has determined that the Merger Agreement and the Merger are fair to, and in the best interests of, Cavium and its shareholders. Accordingly, the Marvell board of directors unanimously recommends that the Marvell shareholders vote “FOR” the approval of the Marvell Share Issuance and the other proposal to be considered at the Marvell general meeting, and the Cavium board of directors unanimously recommends that the Cavium shareholders vote “FOR” the adoption of the Merger Agreement and the other proposals to be considered at the Cavium special meeting.

We are very excited about the opportunities the proposed Merger brings to both Marvell shareholders and Cavium shareholders, and we thank you for your consideration and continued support.

              Sincerely,

 

Matthew J. Murphy   Syed B. Ali

President and Chief Executive Officer

Marvell Technology Group Ltd.

  Co-Founder, Chief Executive Officer and Chairman of the Board of Directors
  Cavium, Inc.

 


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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this joint proxy statement/prospectus or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus is dated February 5, 2018, and is first being mailed to Marvell shareholders and Cavium shareholders on or about February 7, 2018.

REFERENCES TO ADDITIONAL INFORMATION

As used in this joint proxy statement/prospectus, “Marvell” refers to Marvell Technology Group Ltd., “Merger Sub” refers to Kauai Acquisition Corp., and “Cavium” refers to Cavium, Inc. “We” or “our” refers to Marvell and Cavium. This joint proxy statement/prospectus incorporates important business and financial information about Marvell and Cavium from documents that each company has filed with the Securities and Exchange Commission (the “SEC”), but which have not been included in or delivered with this joint proxy statement/prospectus. For a list of documents incorporated by reference into this joint proxy statement/prospectus and how you may obtain them, see “Where You Can Find More Information” beginning on page 236. This information is available to you without charge upon your written or oral request. You can also obtain the documents incorporated by reference into this joint proxy statement/prospectus by accessing the SEC’s website maintained at http://www.sec.gov.

In addition, Marvell’s filings with the SEC are available to the public on Marvell’s website, http://www.marvell.com, and Cavium’s filings with the SEC are available to the public on Cavium’s website, http://www.cavium.com. Information about the Merger and the other transactions contemplated by the Merger Agreement is also contained on the following transaction website: http://marvellcavium.transactionannouncement.com. Information contained on Marvell’s website, Cavium’s website, the transaction website or the website of any other person is not incorporated by reference into this joint proxy statement/prospectus, and you should not consider information contained on those websites as part of this joint proxy statement/prospectus.

Marvell or its proxy solicitor will provide you with copies of the information described above that relate to Marvell, without charge, if you request them in writing or by telephone from:

Marvell Technology Group Ltd.

c/o Marvell Semiconductor, Inc.

5488 Marvell Lane

Santa Clara, California 95054

Attention: Investor Relations

(408) 222-0777

ir@marvell.com

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833


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Cavium or its proxy solicitor will provide you with copies of the information described above that relate to Cavium, without charge, if you request such information in writing or by telephone from:

Cavium, Inc.

2315 N. First Street

San Jose, California 95131

Attention: Investor Relations

(408) 943-7100

IR@Cavium.com

or

MacKenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

Shareholders may call toll free: (800) 322-2885

Banks and Brokers may call collect: (212) 929-5500

proxy@mackenziepartners.com

If you would like to request documents, please do so by February 20, 2018, in order to receive them before the shareholder meetings.

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 (File No.333-222235) filed with the SEC by Marvell, constitutes a prospectus of Marvell under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to Marvell common shares to be issued to Cavium shareholders in connection with the Merger. This joint proxy statement/prospectus also constitutes a joint proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). It also constitutes a notice of meeting with respect to the general meeting of Marvell shareholders and a notice of meeting with respect to the special meeting of Cavium shareholders.

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated February 5, 2018. You should not assume that the information contained in, or incorporated by reference into, this joint proxy statement/prospectus is accurate as of any date other than that date. Neither our mailing of this joint proxy statement/prospectus to Marvell shareholders or Cavium shareholders, nor the issuance by Marvell of common shares in connection with the Merger, will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this joint proxy statement/prospectus regarding Marvell has been provided by Marvell, and information contained in this joint proxy statement/prospectus regarding Cavium has been provided by Cavium.


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LOGO

NOTICE OF GENERAL MEETING OF MARVELL SHAREHOLDERS

TO BE HELD ON MARCH 16, 2018

MARVELL TECHNOLOGY GROUP LTD.

Canon’s Court

22 Victoria Street

Hamilton HM 12

Bermuda

Dear Shareholders of Marvell Technology Group Ltd.:

You are cordially invited to a general meeting of shareholders of Marvell Technology Group Ltd. (“Marvell”) at the offices of Marvell Semiconductor, Inc. located at 5488 Marvell Lane, Santa Clara, California 95054, at 1:00 p.m. local time on March 16, 2018. Only shareholders who hold Marvell common shares at the close of business on February 2, 2018, the record date for the general meeting, are entitled to vote at the general meeting and any adjournments or postponements of the general meeting.

At the general meeting, you will be asked to consider and vote upon and approve the following proposals:

 

  1. To approve the issuance of Marvell common shares (the “Marvell Share Issuance”) in connection with the merger (the “Merger”) of Kauai Acquisition Corp. (“Merger Sub”) with and into Cavium, Inc. (“Cavium”), with Cavium continuing as the surviving corporation in the Merger and as a direct wholly owned subsidiary of Marvell Technology, Inc. (“MTI”), which is a direct wholly owned subsidiary of Marvell; the Merger is being effected pursuant to the Agreement and Plan of Merger, dated as of November 19, 2017 (as it may be amended from time to time, the “Merger Agreement”), by and among Marvell, Merger Sub, and Cavium, a copy of which is attached as Annex A to this joint proxy statement/prospectus; and

 

  2. To approve adjournments of the Marvell general meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the Marvell general meeting to approve the Marvell Share Issuance (the “Marvell Adjournment Proposal”).

No other business will be conducted at the general meeting. This joint proxy statement/prospectus describes the proposals listed above in detail. Please give your careful attention to all of the information contained in or incorporated by reference into this joint proxy statement/prospectus, including the Merger Agreement and the other Annexes, for further information. This joint proxy statement/prospectus is also available on Marvell’s Internet site at http://investor.marvell.com. This joint proxy statement/prospectus contains detailed information about the general meeting, Marvell, Cavium and the Merger. We urge you to read this joint proxy statement/prospectus carefully and in its entirety. In particular, see the section entitled “Risk Factors” beginning on page 25 of this joint proxy statement/prospectus for a discussion of the risks related to the Merger. For specific instructions on how to submit your proxy, please refer to the section of this joint proxy statement/prospectus entitled “The Marvell General Meeting” beginning on page 50.

After careful consideration, the Marvell board of directors has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger and the Marvell Share Issuance, and has determined that the Merger and the Marvell Share Issuance are fair to, and in the best interests of, Marvell and Marvell’s shareholders. The Marvell board of directors accordingly unanimously recommends that you vote “FOR” the approval of the Marvell Share Issuance and “FOR” the Marvell Adjournment Proposal.


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YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

The Merger cannot be completed without the approval of the Marvell Share Issuance by the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting at which a quorum is present, which, under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, excludes abstentions and broker non-votes, if any, which will have no effect on the outcome of the vote on this proposal. Marvell shareholders as of February 2, 2018 may have their Marvell common shares voted by following the instructions provided in this joint proxy statement/prospectus or on the enclosed proxy card or, if your shares are held in “street name,” by following the instructions in the voting instruction form to be provided to you by your bank, broker or other nominee. Marvell strongly recommends that Marvell shareholders entitled to vote submit a proxy even if they plan to attend the Marvell general meeting. Submitting a proxy now (including by telephone or over the Internet) will not prevent you from being able to vote at the Marvell general meeting by attending in person and casting a vote. Abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on the Marvell Share Issuance.

Marvell shareholders who hold their Marvell common shares beneficially in “street name” and wish to submit a proxy must provide instructions to the broker, bank, trustee or other nominee that holds their Marvell common shares as to how to vote their Marvell common shares. A Marvell shareholder who holds his or her Marvell common shares beneficially in “street name” and wishes to vote in person at the Marvell general meeting must obtain a proxy issued in the holder’s own name (known as a “legal proxy”) from the holder’s broker, bank or trustee.

By Order of the Board of Directors,

Mitchell L. Gaynor

Chief Administration and Legal Officer and Secretary

Santa Clara, California

February 5, 2018

Please submit your proxy promptly. You can find instructions for voting on the enclosed proxy card.

If you have any questions concerning the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement, or this joint proxy statement/prospectus, would like additional copies or need help voting your Marvell common shares, please contact Marvell or Marvell’s proxy solicitor:

Marvell Technology Group Ltd.

c/o Marvell Semiconductor, Inc.

5488 Marvell Lane

Santa Clara, California 95054

Attention: Investor Relations

(408) 222-0777

ir@marvell.com

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

YOUR VOTE IS VERY IMPORTANT.


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LOGO

CAVIUM, INC.

2315 N. First Street

San Jose, California 95131

NOTICE OF SPECIAL MEETING OF CAVIUM SHAREHOLDERS

To Be Held on March 16, 2018

Dear Shareholders of Cavium, Inc.:

NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Cavium, Inc., a Delaware corporation (“Cavium”), will be held at Cavium’s corporate headquarters, 2315 N. First Street, San Jose, California 95131, at 10:00 a.m. local time, on March 16, 2018. Only shareholders who hold shares of Cavium common stock at the close of business on February 2, 2018, the record date for the special meeting, are entitled to vote at the special meeting and any adjournments or postponements of the special meeting.

At the special meeting, you will be asked to consider and vote upon and approve the following proposals, as more fully described in this joint proxy statement/prospectus:

 

  1. To approve the adoption of the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of November 19, 2017, by and among Marvell Technology Group Ltd. (“Marvell”), Kauai Acquisition Corp. (“Merger Sub”) and Cavium, the merger of Merger Sub with and into Cavium, with Cavium continuing as the surviving corporation in such merger (the “Merger”), and the other transactions contemplated by the Merger Agreement (the “Merger Proposal”);

 

  2. To approve adjournments of the Cavium special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the Cavium special meeting to approve the Merger Proposal (the “Cavium Adjournment Proposal”); and

 

  3. To approve, by non-binding, advisory vote, compensation that will or may be paid or become payable by Cavium to its named executive officers in connection with the Merger (the “Cavium Non-Binding Compensation Proposal”).

No other business will be conducted at the special meeting. This joint proxy statement/prospectus describes the proposals listed above in more detail. Please give your careful attention to all of the information contained in or incorporated by reference into this joint proxy statement/prospectus, including the Merger Agreement and the other Annexes, for further information. This joint proxy statement/prospectus is also available on Cavium’s Internet site at http://investor.caviumnetworks.com. This joint proxy statement/prospectus contains detailed information about the special meeting, Marvell, Cavium and the Merger. You are encouraged to read the entire joint proxy statement/prospectus carefully before submitting your proxy. In particular, see the section entitled “Risk Factors” beginning on page 25. For specific instructions on how to submit your proxies, please refer to the section of this joint proxy statement/prospectus entitled “The Cavium Special Meeting” beginning on page 57.

After careful consideration, the Cavium board of directors has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Cavium and its shareholders and unanimously recommends that you vote “FOR” the Merger Proposal; “FOR” the Cavium Adjournment Proposal; and “FOR” the Cavium Non-Binding Compensation Proposal.


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YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

The Merger cannot be completed without the adoption of the Merger Agreement by the affirmative vote of a majority of the outstanding shares of Cavium common stock. Cavium shareholders as of February 2, 2018 may have their Cavium common stock voted by following the instructions provided in this joint proxy statement/prospectus or on the enclosed proxy card or, if your shares are held in “street name,” by following the instructions in the voting instruction form to be provided to you by your bank, broker or other nominee. Cavium strongly recommends that Cavium shareholders entitled to vote submit a proxy even if they plan to attend the Cavium special meeting. Submitting a proxy now (including by telephone or over the Internet) will not prevent you from being able to vote at the Cavium special meeting by attending in person and casting a vote. However, if you do not return or submit your proxy (including by telephone or over the Internet) or vote in person at the Cavium special meeting, it will have the same effect as a vote “AGAINST” the approval of the Merger Proposal. If you attend the Cavium special meeting in person or by proxy, and you abstain from voting, that will have the same effect as a vote “AGAINST” approval of the Merger Proposal.

Cavium shareholders who hold their Cavium common stock beneficially in “street name” and wish to submit a proxy must provide instructions to the broker, bank, trustee or other nominee that holds their Cavium common stock as to how to vote their Cavium common stock. A Cavium shareholder who holds his or her Cavium common stock beneficially in “street name” and wishes to vote in person at the Cavium special meeting must obtain a proxy issued in the holder’s own name (known as a “legal proxy”) from the holder’s broker, bank or trustee.

By Order of the Board of Directors,

Syed B. Ali

Chairman of the Board of Directors

San Jose, California

February 5, 2018

Please submit your proxy promptly. You can find instructions for voting on the enclosed proxy card.

If you have any questions concerning the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement, or this joint proxy statement/prospectus, would like additional copies or need help voting your shares of Cavium common stock, please contact Cavium or Cavium’s proxy solicitor:

Cavium, Inc.

2315 N. First Street

San Jose, California 95131

Attention: Investor Relations

(408) 943-7100

IR@Cavium.com

or

MacKenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

Shareholders may call toll free: (800) 322-2885

Banks and Brokers may call collect: (212) 929-5500

proxy@mackenziepartners.com

YOUR VOTE IS VERY IMPORTANT.


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TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND SHAREHOLDER MEETINGS OF MARVELL AND CAVIUM

     1  

SUMMARY

     12  

RISK FACTORS

     25  

Risk Factors Relating to the Merger

     25  

Risk Factors Relating to the Combined Company Following the Merger

     30  

Risk Factors Relating to Marvell Common Shares

     36  

Other Risks

     36  

FINANCIAL SUMMARY

     39  

Comparative Market Price Data for Marvell and Cavium

     39  

Marvell Dividends

     40  

Cavium Dividends

     40  

Selected Historical Consolidated Financial Data of Marvell

     40  

Selected Historical Consolidated Financial Data of Cavium

     42  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     44  

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA AND PER SHARE FINANCIAL INFORMATION

     46  

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

     48  

THE MARVELL GENERAL MEETING

     50  

Overview

     50  

Date, Time and Place of the Marvell General Meeting

     50  

Purposes of the Marvell General Meeting

     50  

Record Date; Issued Shares; Shares Entitled to Vote

     50  

Quorum and Vote Required

     50  

Share Ownership and Voting by Marvell’s Directors and Executive Officers

     51  

How to Vote

     51  

Shares Held in “Street Name”

     52  

Revoking Your Proxy

     53  

Tabulation of the Votes

     53  

Other Voting Matters

     53  

Proxy Solicitations

     54  

Assistance

     54  

PROPOSAL 1 THE MARVELL SHARE ISSUANCE

     55  

PROPOSAL 2 THE MARVELL ADJOURNMENT PROPOSAL

     56  

 

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THE CAVIUM SPECIAL MEETING

     57  

Overview

     57  

Date, Time and Place of the Cavium Special Meeting

     57  

Purposes of the Cavium Special Meeting

     57  

Record Date; Outstanding Shares; Shares Entitled to Vote

     57  

Quorum and Vote Required

     57  

Share Ownership and Voting by Cavium’s Directors and Executive Officers

     58  

How to Vote

     58  

Shares Held in “Street Name”

     59  

Revoking Your Proxy

     60  

Tabulation of the Votes

     60  

Other Voting Matters

     60  

Proxy Solicitations

     61  

Assistance

     61  

PROPOSAL 1 THE MERGER PROPOSAL

     62  

PROPOSAL 2 THE CAVIUM ADJOURNMENT PROPOSAL

     63  

PROPOSAL 3 THE CAVIUM NON-BINDING COMPENSATION PROPOSAL

     64  

THE MERGER

     65  

Overview

     65  

Background of the Merger

     65  

Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors

     78  

Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors

     83  

Opinion of Marvell’s Financial Advisor, Goldman Sachs

     88  

Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan

     100  

Unaudited Prospective Financial Information

     115  

Share Ownership and Voting of Directors and Executive Officers of Marvell and Cavium

     121  

Interests of Cavium Directors and Executive Officers in the Merger

     122  

Voting Agreements

     129  

Indemnification of Directors and Officers

     131  

Regulatory Approvals Required for the Merger

     132  

Litigation Related to the Merger

     133  

Dividend Policy Following the Merger

     134  

No Financing Condition; Financing

     134  

Listing of Marvell Common Shares and Delisting and Deregistration of Cavium Common Stock

     135  

Rights of Appraisal for Cavium Shareholders

     136  

No Rights of Appraisal for Marvell Shareholders

     140  

Accounting Treatment

     140  

Shareholder Rights Plan

     140  

Anti-takeover Statute

     140  

 

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     Page  

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     141  

Tax Consequences of the Merger to U.S. Holders

     142  

Tax Consequences of Holding Marvell Common Shares to U.S. Holders

     142  

THE MERGER AGREEMENT

     146  

The Merger

     146  

Effective Time and Completion of the Merger

     147  

Merger Consideration

     147  

Fractional Shares

     148  

Exchange of Certificates

     148  

Treatment of Cavium Equity Awards

     149  

Representations and Warranties

     150  

Interim Operations of Marvell and Cavium

     153  

No Solicitation or Discussions by Cavium

     157  

No Solicitation or Discussions by Marvell

     159  

Shareholder Meetings; No Change in Board Recommendation

     161  

Financing Matters

     167  

Employee Matters

     170  

Indemnification and Insurance

     171  

Efforts to Complete the Merger

     172  

Listing and Delisting

     174  

Other Covenants

     174  

Conditions to Completion of the Merger

     174  

Termination of the Merger Agreement

     177  

Effect of Termination

     180  

Transaction Expenses and Termination Fees

     180  

Enforcement; Remedies

     182  

Amendment

     182  

Waiver

     182  

Third-Party Beneficiaries

     183  

Governing Law

     183  

INFORMATION ABOUT MARVELL

     184  

INFORMATION ABOUT MERGER SUB

     185  

INFORMATION ABOUT CAVIUM

     186  

COMPARISON OF RIGHTS OF SHAREHOLDERS

     187  

POSSIBLE DOMESTICATION OR HOLDING COMPANY RESTRUCTURING OF MARVELL

     207  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     209  

LEGAL MATTERS

     232  

EXPERTS

     232  

SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS

     233  

Marvell

     233  

Cavium

     234  

Householding

     234  

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER

AND SHAREHOLDER MEETINGS OF MARVELL AND CAVIUM

The following questions and answers briefly address some questions that you may have about the shareholder meetings and the Merger. They may not include all the information that is important to you. Marvell, Merger Sub and Cavium urge you to read carefully this entire joint proxy statement/prospectus, including the Annexes and the other documents to which we have referred you. We have included cross-references in certain parts of this section to direct you to a more detailed description of each topic presented elsewhere in this joint proxy statement/prospectus.

 

Q: What is this document?

 

A: This joint proxy statement/prospectus serves as the joint proxy statement through which Marvell and Cavium provide their respective shareholders with important information regarding their respective shareholder meetings, the Merger and the other transactions contemplated by the Merger Agreement, and solicit proxies to obtain approvals from their respective shareholders for the Merger Proposal (in the case of Cavium) and the Marvell Share Issuance (in the case of Marvell). It also serves as the prospectus by which Marvell will offer and issue Marvell common shares in connection with the Merger.

 

Q: Why am I receiving this joint proxy statement/prospectus?

 

A: In order to complete the transactions contemplated by the Merger Agreement, including the Merger, Cavium shareholders must approve the Merger Proposal and Marvell shareholders must approve the Marvell Share Issuance, and all other conditions to the Merger set forth in the Merger Agreement must be satisfied or waived. Marvell and Cavium will hold separate meetings of their respective shareholders to vote on these proposals. This joint proxy statement/prospectus contains important information, which you should read carefully, about the Merger Agreement, the transactions contemplated by the Merger Agreement, including the Merger and the Marvell Share Issuance, and the respective meetings of the shareholders of Marvell and Cavium.

The enclosed proxy materials allow you to grant a proxy to vote your shares by completing the enclosed proxy card or by submitting your proxy by telephone or over the Internet without attending your company’s shareholder meeting in person.

Your vote is important. We encourage you to submit your proxy as soon as possible.

 

Q: What is the proposed transaction for which I am being asked to vote?

 

A: Marvell shareholders are being asked to approve the Marvell Share Issuance and the Marvell Adjournment Proposal. Cavium shareholders are being asked to approve the Merger Proposal, the Cavium Adjournment Proposal and the Cavium Non-Binding Compensation Proposal.

 

Q: What if Marvell shareholder approval of the Marvell Share Issuance is not obtained?

 

A: If the Marvell Share Issuance is not approved, then the Merger will not occur.

 

Q: What if Cavium shareholder approval of the Merger Proposal is not obtained?

 

A: If the Merger Proposal is not approved, then the Merger will not occur.

 

Q: Why are Marvell and Cavium proposing the Merger?

 

A:

The respective boards of directors of Marvell and Cavium believe that the Merger will provide substantial strategic and financial benefits to the shareholders of their respective companies. To review the reasons for

 

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  the Merger, see “The Merger—Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors” and “The Merger—Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors” for more information.

 

Q: What are the positions of the Marvell board of directors and the Cavium board of directors regarding the Merger and the related proposals that are being put to a vote of their respective shareholders?

 

A: Marvell. The Marvell board of directors has determined that the Merger and the Marvell Share Issuance are fair to, and in the best interests of, Marvell and its shareholders and has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger and the Marvell Share Issuance. The Marvell board of directors unanimously recommends that the Marvell shareholders vote “FOR” the approval of the Marvell Share Issuance and “FOR” the Marvell Adjournment Proposal at the Marvell general meeting. See “The Merger—Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors” for more information.

Cavium. The Cavium board of directors has determined that the Merger Agreement and the Merger are fair to, and in the best interests of, Cavium and its shareholders and has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger. The Cavium board of directors unanimously recommends that the Cavium shareholders vote “FOR” the Merger Proposal, “FOR” the Cavium Adjournment Proposal and “FOR” the Cavium Non-Binding Compensation Proposal at the Cavium special meeting. See “The Merger—Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors” for more information.

 

Q: What vote is required to approve each proposal on the agenda for the Marvell general meeting?

 

A: Approval of the Marvell Share Issuance requires the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting at which a quorum is present, which, under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, excludes abstentions and broker non-votes, if any, which will have no effect on the outcome of the vote on this proposal. An abstention occurs when a Marvell shareholder attends the Marvell general meeting in person, or is represented at the Marvell general meeting by proxy, and abstains from voting. Shares not in attendance and not represented by proxy at the Marvell general meeting will have no effect on the outcome of the vote on the Marvell Share Issuance, provided that a quorum is present. See “Questions and Answers about the Shareholder Meetings and the Merger—What if I don’t provide my bank, broker or other nominee with instructions on how to vote?” for an explanation of broker non-votes.

Approval of the Marvell Adjournment Proposal requires the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting, regardless of whether a quorum is present. Under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, if you are present in person or represented by proxy, attend the meeting in person or by proxy, and vote to abstain, it will have no effect on the outcome of the vote on the Marvell Adjournment Proposal. Also under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, broker non-votes, if any, and shares not in attendance and not represented by proxy at the Marvell general meeting also will have no effect on the outcome of the Marvell Adjournment Proposal. See “The Marvell General Meeting—Quorum and Vote Required” for more information.

 

Q: What vote is required to approve each proposal on the agenda for the Cavium special meeting?

 

A: The Merger Proposal requires the affirmative vote of a majority of the outstanding shares of Cavium common stock entitled to vote at the Cavium special meeting. Abstentions, broker-non votes and shares not represented at the Cavium special meeting will have the same effect as a vote “AGAINST” the Merger Proposal.

To approve the Cavium Adjournment Proposal, the affirmative vote of a majority of the shares of Cavium common stock present in person or represented by proxy at the Cavium special meeting and entitled to vote

 

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is required, regardless of whether a quorum is present. Abstentions will have the same effect as a vote “AGAINST” the Cavium Adjournment Proposal, while broker non-votes and shares not represented at the Cavium special meeting will have no effect on the outcome of the vote on the Cavium Adjournment Proposal.

To approve the Cavium Non-Binding Compensation Proposal, the affirmative vote of a majority of the shares of Cavium common stock present in person or represented by proxy at the Cavium special meeting and entitled to vote is required, assuming a quorum is present. Abstentions will have the same effect as a vote “AGAINST” the Cavium Non-Binding Compensation Proposal, while broker non-votes and shares not represented at the Cavium special meeting will have no effect on the outcome of the Cavium Non-Binding Compensation Proposal, provided that a quorum is present. See “The Cavium Special Meeting—Quorum and Vote Required” for more information. The Cavium Non-Binding Compensation Proposal is advisory, and therefore not binding on Cavium, Cavium’s compensation committee or the Cavium board of directors. Accordingly, regardless of the outcome of the Cavium Non-Binding Compensation Proposal, if the Merger is completed, Cavium’s named executive officers may be or become entitled to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments. See “The Cavium Special Meeting—Quorum and Vote Required” for more information.

 

Q: How many votes do I have?

 

A: Marvell shareholders are entitled to one vote for each Marvell common share owned by such holders at the close of business on February 2, 2018 (the “Marvell record date”). See “The Marvell General Meeting—Record Date; Issued Shares; Shares Entitled to Vote” for more information.

Cavium shareholders are entitled to one vote for each share of Cavium common stock owned by such holders at the close of business on February 2, 2018 (the “Cavium record date”). See “The Cavium Special Meeting—Record Date; Outstanding Shares; Shares Entitled to Vote” for more information.

 

Q: What will happen in the Merger?

 

A: In the Merger, Merger Sub, a direct wholly owned subsidiary of MTI, which is a direct wholly owned subsidiary of Marvell, will merge with and into Cavium, with Cavium continuing as the surviving corporation in the Merger and as an indirect wholly owned subsidiary of Marvell. See “The Merger Agreement—Effective Time and Completion of the Merger” for more information.

 

Q: Will the Merger affect the board of directors or officers of Marvell after the Merger?

 

A: Yes, the Merger will affect the board of directors of Marvell after the Merger. Under the Merger Agreement, Marvell has agreed to take all necessary corporate actions prior to the Effective Time (as defined below in “The Merger Agreement—Effective Time and Completion of the Merger”) such that the Chairman of the board of directors of Cavium and two other members of the Cavium board of directors to be designated by Marvell will become members of Marvell’s board of directors as of the Effective Time. Anil Jain, Corporate Vice President of Cavium, and M. Raghib Hussain, Chief Operating Officer of Cavium, will each become officers of Marvell upon completion of the Merger. Marvell expects that all directors and officers of Marvell will continue to serve as members of the board of directors and officers of Marvell, as applicable, after the completion of the Merger.

 

Q: What will Cavium shareholders receive in the Merger?

 

A: Each Cavium shareholder will receive, in exchange for each share of Cavium common stock held by such holder, 2.1757 (the “Exchange Ratio”) Marvell common shares and $40.00 in cash, without interest (the “Per Share Cash Amount”).

 

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Marvell will not issue fractional shares as a result of the Merger; each holder of Cavium common stock that would otherwise be entitled to a fraction of a Marvell common share (after aggregating all fractions of a Marvell common share issuable to such shareholder) will, upon surrender of such holder’s Cavium stock certificate(s) or the transfer of such holder’s non-certificated shares represented by book entry positions, be entitled to receive an amount in cash (rounded to the nearest whole cent), without interest, equal to the product obtained by multiplying such fraction by the closing price of a Marvell common share on NASDAQ on the closing date of the Merger. The Marvell common shares (and cash in lieu of any fraction of a Marvell common share) and the cash consideration that a Cavium shareholder is entitled to receive in exchange for the shares of Cavium common stock held by such holder pursuant to the Merger Agreement is referred to in this joint proxy statement/prospectus as the “Merger Consideration.”

 

Q: What will Marvell shareholders receive in the Merger?

 

A: Marvell shareholders will not receive any consideration in the Merger and will continue to hold the Marvell common shares they currently own.

 

Q: If I am a Cavium shareholder, how will I receive the Merger Consideration to which I will be entitled if the Merger is completed?

 

A: You will be paid the Merger Consideration as promptly as practicable after the closing of the Merger and after receipt by the Exchange Agent (as defined below in “The Merger Agreement—Exchange of Certificates”) of your stock certificates (or evidence of the transfer of shares in book-entry form), a duly executed letter of transmittal and any additional documents required by the procedures set forth in the letter of transmittal. See “The Merger Agreement—Exchange of Certificates.

 

Q: What happens if the market price of Marvell common shares or Cavium common stock changes before the completion of the Merger?

 

A: No change will be made to the Exchange Ratio based on fluctuations in the market price of either Marvell common shares or Cavium common stock. As a result, the number of Marvell common shares that you receive as consideration in the Merger is fixed and will not change. However, the value of the consideration to be received by Cavium shareholders in the Merger may increase or decrease depending on the market price of Marvell common shares at the Effective Time.

On November 2, 2017, the last trading day prior to the first media report of a possible transaction between Marvell and Cavium, the closing price of Marvell common shares on NASDAQ was $18.28. On January 22, 2018, the last practicable trading day prior to the filing of this joint proxy statement/prospectus, the closing price of Marvell common shares on NASDAQ was $23.62 per share. We urge you to obtain current market quotations before voting your shares.

 

Q: Will Marvell and Cavium continue to pay dividends or distributions prior to the completion of the Merger?

 

A: The Merger Agreement permits Marvell to continue to pay ordinary quarterly cash dividends on its common shares. Decisions regarding whether or not to pay ordinary quarterly cash dividends and the amount of any such dividends will be based on the judgment of the Marvell board of directors. While Marvell anticipates that it would continue to pay dividends, Marvell can make no assurances that this will be the case. Cavium has never paid cash dividends on its common stock and is prohibited under the Merger Agreement from declaring or paying any dividend without Marvell’s prior written consent.

 

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Q: As a Cavium shareholder, will I be able to trade the Marvell common shares that I receive in connection with the Merger?

 

A: Yes. The Marvell common shares to be issued in connection with the Merger will be listed on NASDAQ under the symbol “MRVL.” However, certain persons who become affiliates of Marvell after the Merger will be required to comply with Rule 144 promulgated under the Securities Act if they wish to sell or otherwise transfer any of the Marvell common shares received in connection with the Merger.

 

Q: What percentage of Marvell common shares will be owned by former Cavium shareholders following the Merger?

 

A: The additional Marvell common shares issued to shareholders of Cavium in connection with the Merger will comprise approximately 23.3% of Marvell’s issued common shares immediately following the Effective Time, based on the number of issued Marvell common shares and the number of outstanding shares of Cavium common stock on January 22, 2018, excluding the effect of outstanding options, restricted stock units or other equity-based awards to purchase Marvell common shares or Cavium common stock.

 

Q: Do Cavium shareholders have appraisal rights?

 

A: Yes. Because Cavium is a Delaware corporation, under the General Corporation Law of the State of Delaware (the “DGCL”), holders of Cavium common stock who do not vote for the adoption of the Merger Agreement have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the Merger is completed, but only if they comply with all applicable requirements of Delaware law, which are summarized in this joint proxy statement/prospectus and attached as Annex E. This appraisal amount could be more than, the same as, or less than the amount a Cavium shareholder would be entitled to receive under the Merger Agreement. Any Cavium shareholder intending to exercise appraisal rights, among other things, must submit a written demand for appraisal to Cavium prior to the vote on the adoption of the Merger Agreement and must not vote or submit a proxy in favor of adoption of the Merger Agreement. Failure to follow exactly the procedures specified under Delaware law will result in the loss of appraisal rights. These procedures are summarized in this joint proxy statement/prospectus in the section entitled “The Merger—Rights of Appraisal for Cavium Shareholders. Because of the complexity of Delaware law relating to appraisal rights, if you are considering exercising your appraisal rights, Cavium encourages you to seek the advice of your own legal counsel.

 

Q: Do Marvell shareholders have appraisal rights?

 

A: No. Marvell shareholders do not have appraisal rights as a result of the Merger.

 

Q: When do you expect to complete the Merger?

 

A: Marvell and Cavium currently expect to complete the Merger in the middle of calendar year 2018, subject to the satisfaction or waiver of the conditions described in “The Merger Agreement—Conditions to Completion of the Merger.

 

Q: What is required to complete the Merger?

 

A: In addition to the approval of the Marvell Share Issuance by Marvell shareholders and the adoption of the Merger Agreement by Cavium shareholders, completion of the Merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of a number of other conditions, including the receipt of required regulatory approvals, the accuracy of Marvell’s and Cavium’s respective representations and warranties under the Merger Agreement (subject to certain materiality exceptions) and Marvell’s and Cavium’s performance of their respective obligations under the Merger Agreement in all material respects. See “The Merger AgreementConditions to Completion of the Merger” for more information regarding conditions to the completion of the Merger.

 

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Q: What are the U.S. federal income tax consequences of the Merger to U.S. holders of Cavium common stock?

 

A: The exchange of Cavium common stock in connection with the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “Material United States Federal Income Tax Consequences”) of Cavium common stock who receives Merger Consideration in exchange for such U.S. holder’s shares of Cavium common stock generally will recognize taxable gain or loss in an amount equal to the difference, if any, between the fair market value of the Merger Consideration received and such U.S. holder’s adjusted tax basis in the shares of Cavium common stock exchanged therefor. See “Material United States Federal Income Tax Consequences” for more information.

 

Q: Is the completion of the Merger subject to a financing condition?

 

A: No. The completion of the Merger is not subject to any financing condition.

 

Q: What is the amount of debt to be incurred by Marvell in connection with the Merger?

 

A: Marvell anticipates that it will need a total of approximately $3.4 billion in order to pay Cavium’s shareholders the cash portion of the Merger Consideration, to refinance certain existing indebtedness of Cavium and to pay related fees and expenses. Marvell expects to obtain debt financing totaling $1.75 billion. Marvell has entered into a debt commitment letter for a $900 million three-year term loan facility and an $850 million 364-day bridge facility. In lieu of borrowing, in whole or in part, under the bridge facility, Marvell may incur permanent debt financing. There can be no assurance that Marvell will be able to obtain any such permanent debt financing. The proceeds from the new debt facilities and any such permanent debt financing are expected to be used to pay, together with Marvell’s and Cavium’s cash on hand, the cash portion of the Merger Consideration, to refinance existing indebtedness of Cavium and to pay related fees and expenses.

 

Q: What risks should I consider in deciding whether to vote in favor of the issuance of Marvell common shares in connection with the Merger or the adoption of the Merger Agreement?

 

A: You should carefully review the section of this joint proxy statement/prospectus entitled “Risk Factors” beginning on page 25, which presents some of the risks and uncertainties relating to the Merger and the businesses of each of Marvell and Cavium.

 

Q: Does my vote matter?

 

A: Yes, your vote is very important. Marvell and Cavium cannot complete the Merger unless the Cavium shareholders approve the Merger Proposal and the Marvell shareholders approve the Marvell Share Issuance. Whether or not you plan to attend the Marvell general meeting or the Cavium special meeting, please vote as soon as possible by following the instructions in this joint proxy statement/prospectus.

 

Q: Should Cavium shareholders send in stock certificates now?

 

A: NO, CAVIUM SHAREHOLDERS SHOULD NOT SEND STOCK CERTIFICATE(S) WITH THEIR PROXY CARDS. If the Merger is completed, the Exchange Agent will send Cavium shareholders written instructions for sending in their stock certificates or, in the case of book-entry shares, for surrendering their book-entry shares. See “The Cavium Special Meeting—Proxy Solicitations” and “The Merger Agreement—Exchange of Certificates” for more information.

 

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Q: Who can answer my questions about the Merger?

 

A: If you have any questions about the Merger or your shareholder meeting, need assistance in voting your shares, or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card(s), you should contact:

If you are a Marvell shareholder:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

If you are a Cavium shareholder:

MacKenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

Shareholders may call toll free: (800) 322-2885

Banks and Brokers may call collect: (212) 929-5500

proxy@mackenziepartners.com

 

Q: When and where are the shareholder meetings?

 

A: The Marvell general meeting will be held at the offices of Marvell Semiconductor, Inc., located at 5488 Marvell Lane, Santa Clara, California 95054, at 1:00 p.m., local time on March 16, 2018.

The Cavium special meeting will be held at Cavium headquarters located at 2315 North First Street, San Jose, California 95131, at 10:00 a.m., local time on March 16, 2018.

 

Q: Who is eligible to vote at the Marvell general meeting and the Cavium special meeting?

 

A: Owners of Marvell common shares are eligible to vote at the Marvell general meeting if they are shareholders of record at the close of business on the Marvell record date. See “The Marvell General Meeting—Record Date; Issued Shares; Shares Entitled to Vote” for more information.

Owners of Cavium common stock are eligible to vote at the Cavium special meeting if they are shareholders of record at the close of business on the Cavium record date. See “The Cavium Special Meeting—Record Date; Outstanding Shares; Shares Entitled to Vote” for more information.

 

Q: Can I attend the shareholder meetings in person?

 

A: If you were a Marvell shareholder as of the close of business on the Marvell record date or you hold a valid legal proxy for the Marvell general meeting, you may attend the Marvell general meeting. Similarly, if you were a Cavium shareholder as of the close of business on the Cavium record date or you hold a valid legal proxy for the Cavium special meeting, you may attend the Cavium special meeting.

You should be prepared to present a form of personal identification for admittance. In addition, if you are a record holder, your name will be verified against the list of record holders on the record date prior to being admitted to the meeting. If you are not a record holder but hold shares through a broker, bank or other nominee (i.e., in “street name”), you will need to provide proof of beneficial ownership on the record date, such as your most recent account statement prior to the record date, or other similar evidence of ownership. If you do not provide a form of personal identification or comply with the other procedures outlined above upon request, you may not be admitted to the meeting.

 

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Q: What constitutes a quorum?

 

A: A quorum for the Marvell general meeting is the presence at the meeting, either in person or by proxy, of holders representing in excess of 50% of the total issued voting shares of Marvell throughout the Marvell general meeting. Abstentions (i.e., Marvell common shares that are represented in person at the Marvell general meeting or for which proxies have been received, but for which the holders have abstained from voting), if any, and broker non-votes, if any, will be included in the calculation of the number of Marvell common shares represented at the Marvell general meeting for purposes of determining whether a quorum is present.

 

   A quorum for the Cavium special meeting is the presence at the meeting, either in person or by proxy, of holders of outstanding Cavium common stock entitled to vote and representing at least a majority of the outstanding voting power of Cavium common stock. Abstentions (i.e., shares of Cavium common stock that are represented in person at the special meeting or for which proxies have been received but for which the holders have abstained from voting), if any, will be included in the calculation of the number of shares of Cavium common stock represented at the special meeting for purposes of determining whether a quorum is present. Broker non-votes, if any, will not be included in the calculation of the number of shares of Cavium common stock represented at the special meeting for purposes of determining whether a quorum is present.

 

Q: What should I do now?

 

A: You should read this joint proxy statement/prospectus carefully, including the Annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be represented and voted at the Marvell general meeting or the Cavium special meeting, as applicable. A number of banks and brokerage firms participate in a program that also permits shareholders whose shares are held in “street name” to direct their vote by telephone or over the Internet. This option, if available, will be reflected in the voting instructions from the bank or brokerage firm that accompany this joint proxy statement/prospectus. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. See “The Marvell General Meeting—How to Vote” and “The Cavium Special Meeting—How to Vote” for more information.

 

Q: What happens if I sell my shares before the Marvell or Cavium shareholder meeting?

 

A: If a Cavium shareholder transfers its shares of Cavium common stock after the Cavium record date or a Marvell shareholder transfers its Marvell common shares after the Marvell record date, as applicable, but before the Cavium special meeting or the Marvell general meeting, as applicable, the shareholder will retain (subject to any arrangements made with the purchaser of such shareholder’s shares) such shareholder’s right to vote at the Cavium special meeting or the Marvell general meeting, as applicable. However, in order for Cavium shareholders to receive the Merger Consideration, they must hold their shares through the Effective Time.

 

Q: How do I vote my Marvell common shares?

 

A: You may vote your Marvell common shares in person at the Marvell general meeting or by submitting a proxy (including proxies received by telephone or over the Internet). Marvell recommends that you submit your proxy even if you plan to attend the Marvell general meeting. If you submit your proxy, you may change your vote if you attend and vote at the Marvell general meeting; however, mere attendance at the Marvell general meeting will not revoke your previously issued proxy.

Owners of record (that is, shareholders who hold Marvell common shares in their own name and not through a bank, broker or other nominee) as of the close of business on February 2, 2018, the record date for the Marvell general meeting, may vote in person at the Marvell general meeting or by proxy. This means

 

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that you may use the enclosed proxy card(s) (or submit your proxy by telephone or over the Internet) to instruct the persons named as proxies how to vote your Marvell common shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your Marvell common shares will be voted in accordance with your instructions. The named proxies will vote all Marvell common shares at the Marvell general meeting for which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record have three ways to vote by proxy:

 

    Internet: You can submit your proxy over the Internet at the web address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy over the Internet, do not return your proxy card(s).

 

    Telephone: You can submit your proxy by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy by telephone, do not return your proxy card(s).

 

    Mail: You can submit your proxy by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

If you sign and return your proxy card(s) but do not mark your card(s) to instruct the proxies how to vote your Marvell common shares on each proposal, your Marvell common shares will be voted as recommended by the Marvell board of directors (i.e., “FOR” each proposal presented to the shareholders).

 

Q: How do I vote my Cavium common stock?

 

A: You may vote your shares of Cavium common stock in person at the Cavium special meeting or by submitting a proxy (including proxies received by telephone or over the Internet). Cavium recommends that you submit your proxy even if you plan to attend the Cavium special meeting. If you submit your proxy, you may change your vote if you attend and vote at the Cavium special meeting; however, mere attendance at the Cavium special meeting will not revoke your previously issued proxy.

Owners of record (that is, shareholders who hold shares of Cavium common stock in their own name and not through a bank, broker or other nominee), as of the close of business on February 2, 2018, the record date for the Cavium special meeting, may vote in person at the Cavium special meeting or by proxy. This means that you may use the enclosed proxy card(s) (or submit your proxy by telephone or the Internet) to instruct the persons named as proxies how to vote your shares of Cavium common stock. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your shares of Cavium common stock will be voted in accordance with your instructions. The named proxies will vote all shares of Cavium common stock at the Cavium special meeting for which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record have three ways to vote by proxy:

 

    Internet: You can submit your proxy over the Internet at the web address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy over the Internet, do not return your proxy card(s).

 

    Telephone: You can submit your proxy by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy by telephone, do not return your proxy card(s).

 

    Mail: You can submit your proxy by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

 

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If you sign and return your proxy card(s) but do not mark your card(s) to instruct the proxies how to vote your shares of Cavium common stock on each proposal, your shares of Cavium common stock will be voted as recommended by the Cavium board of directors (i.e., “FOR” each proposal presented to the shareholders).

 

Q: If I am going to attend my shareholder meeting, should I return my proxy card(s)?

 

A: Yes. Returning your completed, signed and dated proxy card(s) or submitting your proxy by telephone or over the Internet ensures that your shares will be represented and voted at your shareholder meeting. See “The Marvell General Meeting—How to Vote” and “The Cavium Special Meeting—How to Vote” for more information.

 

Q. Can I change my vote after I mail my proxy card(s) or vote by telephone or over the Internet?

 

A: Yes. If you are a shareholder of record of Marvell common shares or of Cavium common stock (that is, you hold your shares in your own name and not through a bank, broker or other nominee) as of the close of business on the applicable record date for your shareholder meeting, you can change your vote by:

 

    sending a written notice to the corporate secretary of the company in which you hold shares, bearing a date later than the date of the proxy, that is received prior to your shareholder meeting and stating that your proxy is revoked;

 

    signing, dating and delivering a new valid proxy card(s) bearing a later date that is received prior to your shareholder meeting;

 

    submitting your voting instructions again by telephone or over the Internet by 11:59 p.m. Eastern time on March 15, 2018; or

 

    attending your shareholder meeting and voting in person, although your attendance at the shareholder meeting will not, by itself, revoke your proxy.

If you are a “street name” shareholder and submitted voting instructions to your broker, bank or other nominee, please refer to the instructions provided by your broker, bank or other nominee on how to change your vote.

 

Q: What if my bank, broker or other nominee holds my shares in “street name”?

 

A: If a bank, broker or other nominee holds your shares, your shares are held in “street name.” In that case, your bank, broker or other nominee will send you a voting instruction form to use in voting your shares. The availability of telephone and Internet voting depends on the voting procedures of your bank, broker or other nominee. Please follow the instructions on the voting instruction form they send you. If your shares are held in the name of your bank, broker or other nominee and you wish to vote in person at your shareholder meeting, you must contact your bank, broker or other nominee and request a document called a “legal proxy.” You must bring this legal proxy to your shareholder meeting in order to vote in person.

 

Q: What if I don’t provide my bank, broker or other nominee with instructions on how to vote?

 

A: Generally, a bank, broker or other nominee may vote the shares that it holds for you only in accordance with your instructions. However, if your bank, broker or other nominee has not received your instructions, your bank, broker or other nominee has the discretion to vote on certain matters that are considered routine. A “broker non-vote” occurs if your bank, broker or other nominee cannot vote on a particular matter because your bank, broker or other nominee has not received instructions from you and because the proposal is not routine. Each of the matters being presented to shareholders for a vote at the shareholder meetings of Marvell and Cavium is not considered a routine matter. Therefore, your bank, broker or other nominee will not be permitted to vote at the shareholder meeting without instruction from you as the beneficial owner of Marvell common shares or Cavium common stock.

 

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Q: What if I abstain from voting?

 

A: Your abstention from voting will have the following effect:

If you are a Marvell shareholder:

For all proposals, a properly executed proxy marked “abstain” will be counted in determining whether a quorum is present at the Marvell general meeting, but, under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, will be excluded from, and will have no effect on the outcome of, the vote on the approval of the Marvell Share Issuance or the Marvell Adjournment Proposal.

If you are a Cavium shareholder:

For all proposals, a properly executed proxy marked “abstain” will be counted in determining whether a quorum is present at the Cavium special meeting. With respect to the Merger Proposal, abstentions will have the same effect as a vote “AGAINST” the Merger Proposal. With respect to the Cavium Adjournment Proposal and the Cavium Non-Binding Compensation Proposal, abstentions will have the same effect as votes “AGAINST” such proposals.

 

Q: What does it mean if I receive multiple proxy cards or voting instruction forms?

 

A: Your shares may be registered in more than one account, such as brokerage accounts and 401(k) accounts. It is important that you complete, sign, date and return each proxy card or voting instruction form you receive or submit your proxy using the telephone or the Internet as described in the instructions included with your proxy card(s) or voting instruction form(s).

 

Q: What happens if I am a shareholder of both Marvell and Cavium?

 

A: You will receive separate proxy cards from each company and must complete, sign and date each proxy card and return each proxy card in the appropriate preaddressed postage-paid envelope or by submitting a proxy by one of the other methods specified in your proxy card or voting instruction form for each company.

 

Q: Where can I find more information about Marvell and Cavium?

 

A: You can find more information about Marvell and Cavium from various sources described under “Where You Can Find More Information.

 

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SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and might not contain all of the information that is important to you. You should read carefully this entire joint proxy statement/prospectus, including the Annexes, to fully understand the Merger and the related transactions. In addition, Marvell and Cavium incorporate by reference into this joint proxy statement/prospectus important business and financial information about Marvell and Cavium. See “Where You Can Find More Information” for more information.

Information About Marvell (beginning on page 184)

Marvell is a fabless semiconductor provider of application-specific semiconductor products. As a fabless semiconductor company, Marvell focuses on the design, development and marketing of semiconductor products and forms relationships with foundries, assembly and test facilities for the manufacture of these products. Marvell’s semiconductors perform analog, mixed-signal and digital signal processing, and Marvell designs both stand-alone and embedded semiconductors. Marvell’s core strength lies in the development of complex integrated circuits that incorporate all components of an electronic system in one chip—so-called SoC devices. Marvell’s broad product portfolio includes devices for storage, networking and connectivity, and Marvell’s market segments include the enterprise, cloud, automotive, industrial and consumer markets.

Marvell was incorporated in Bermuda in January 1995. Marvell’s registered and mailing address is Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, and its telephone number there is (441) 296-6395. The address of Marvell’s U.S. operating subsidiary is Marvell Semiconductor, Inc., 5488 Marvell Lane, Santa Clara, California 95054, and its telephone number there is (408) 222-2500. Marvell also has subsidiaries and operations in many countries, including China, India, Israel, Japan, Singapore, South Korea, Taiwan and Vietnam. Marvell’s fiscal year ends on the Saturday nearest January 31. As of January 22, 2018, Marvell had a total of approximately 3,770 employees, and held approximately 9,500 U.S. and foreign patents issued and approximately 2,300 U.S. and foreign patent applications pending on various aspects of Marvell technology.

Marvell common shares are listed on NASDAQ under the symbol “MRVL.”

Additional information about Marvell and its subsidiaries is included in documents incorporated by reference in this joint proxy statement/prospectus. See “Documents Incorporated by Reference” for more information.

Information About Merger Sub (beginning on page 185)

Merger Sub, a direct wholly owned subsidiary of MTI, which is a direct wholly owned subsidiary of Marvell, is a Delaware corporation that was formed on November 17, 2017, for the purpose of effecting the Merger. In the Merger, Merger Sub will be merged with and into Cavium, with Cavium surviving as an indirect wholly owned subsidiary of Marvell.

Information About Cavium (beginning on page 186)

Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. Cavium’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity and security processors for offload and appliance. A range of Cavium’s products also include a rich suite of embedded security protocols that enable unified threat management, or UTM, secure connectivity, network perimeter protection and deep packet inspection, or DPI. Cavium sells its products to networking original equipment manufacturers, or OEM, that sell into the enterprise, datacenter, service provider, and broadband and consumer markets. Cavium also sells its products through channels, original design manufacturers, or ODM, as well as direct sales to mega data centers.



 

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In the enterprise market, Cavium’s products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks, or WLAN, and UTM. In the datacenter market, Cavium’s products are used in servers for data and storage connectivity as well as security offload and server load balancers. In the service provider market in wired infrastructure Cavium’s products are used in edge routers, cable modem termination system head-ends, and media gateways, and in wireless infrastructure in 3G/4G/5G base stations, radio network controllers, micro/macro cell, evolved packet core nodes, and CloudRAN. In the broadband and consumer market Cavium’s products are used in home gateways, wireless high-definition multimedia interface, or HDMI, WLAN, small office/home office, and UTM. Several of Cavium’s products are systems on a chip, or SoCs, which incorporate single or multiple processor cores, a highly integrated architecture and customizable software that is based on a broad range of standard operating systems.

Cavium focuses its resources on the design, sales and marketing of its products, and outsources the manufacturing of its products. Cavium expanded its server data and storage connectivity product portfolio in August 2016 with its acquisition of QLogic Corporation (“QLogic”). Cavium has a broad portfolio of multi-core processors to deliver integrated and optimized hardware and software embedded solutions to the market. Cavium’s software and service revenue is primarily from the sale of software subscriptions of embedded Linux operating system, related development tools, application software stacks, support, and professional services.

Cavium common stock is traded on NASDAQ under the symbol “CAVM.” Following the Merger, Cavium common stock will be delisted from NASDAQ.

Cavium was incorporated under the laws of the state of California in November 2000 and reincorporated under the laws of the State of Delaware in February 2007. The address of Cavium’s principal executive office is 2315 N. First Street, San Jose, California 95131, and its telephone number is (408) 943-7100. Additional information about Cavium and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus. See “Documents Incorporated by Reference” for more information.

The Merger (beginning on page 146)

Upon the terms and subject to the conditions of the Merger Agreement, and in accordance with Delaware law, at the Effective Time, Merger Sub will merge with and into Cavium. The separate corporate existence of Merger Sub will cease, and Cavium will continue as the surviving corporation in the Merger as an indirect wholly owned subsidiary of Marvell.

We encourage you to read in its entirety the Merger Agreement, which governs the Merger and is attached as Annex A to this joint proxy statement/prospectus, as it sets forth the terms of the Merger.

Merger Consideration (beginning on page 147)

At the Effective Time, each share of Cavium common stock that is outstanding immediately prior to the Effective Time (other than shares held by Marvell, Cavium or any of their respective subsidiaries and shares as to which appraisal rights have been properly exercised pursuant to Delaware law, as described in “The Merger—Rights of Appraisal for Cavium Shareholders”) will be converted into the right to receive (a) 2.1757 Marvell common shares and (b) $40.00 in cash, without interest.

On November 2, 2017, the last trading day prior to the first media report stating that Marvell and Cavium were in advanced discussions regarding a potential transaction, the closing price of Marvell common shares on NASDAQ was $18.28. On January 22, 2018, the last practicable trading day prior to the filing of this joint proxy statement/prospectus, the closing price of Marvell common shares on NASDAQ was $23.62 per share.



 

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No Financing Condition; Financing (beginning on page 134)

Marvell’s obligation to complete the Merger is not subject to a financing condition. Marvell anticipates that it will need approximately $3.4 billion in order to pay Cavium’s shareholders the cash portion of the Merger Consideration, to refinance certain existing indebtedness of Cavium and to pay related fees and expenses. Marvell expects to enter into new debt facilities totaling $1.75 billion. Marvell has received commitments for a $900 million three-year term loan facility and an $850 million, 364-day bridge facility. In lieu of borrowing, in whole or in part, under the bridge facility, Marvell may incur permanent debt financing. There can be no assurance that Marvell will be able to obtain any such permanent debt financing. The proceeds from the new debt facilities and any such permanent debt financing are expected to be used to pay, together with Marvell’s and Cavium’s cash on hand, the cash portion of the Merger Consideration, to refinance existing indebtedness of Cavium and to pay related fees and expenses.

Recommendation of the Marvell Board of Directors to Marvell’s Shareholders (beginning on page 78)

After careful consideration, the Marvell board of directors, on November 18, 2017, unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger and the Marvell Share Issuance, and determined that the Merger and the Marvell Share Issuance are fair to, and in the best interests of, Marvell and its shareholders. The Marvell board of directors consulted with members of Marvell’s management and Marvell’s legal and financial advisors and considered a number of factors, including those listed in “The Merger—Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors.”

The Marvell board of directors unanimously recommends that Marvell shareholders vote FOR” the approval of the Marvell Share Issuance and FOR” the Marvell Adjournment Proposal.

Recommendation of the Cavium Board of Directors to Cavium’s Shareholders (beginning on page 83)

After careful consideration, the Cavium board of directors, on November 19, 2017, unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of, Cavium and its shareholders. The Cavium board of directors consulted with members of Cavium’s management and Cavium’s legal and financial advisors and considered a number of factors, including those listed in “The Merger—Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors.”

The Cavium board of directors unanimously recommends that Cavium shareholders vote FOR” the Merger Proposal, FOR” the Cavium Adjournment Proposal and FOR” the Cavium Non-Binding Compensation Proposal.

Opinions of Financial Advisors (beginning on page 88 for Marvell’s financial advisor and on page 100 for Cavium’s financial advisors)

Opinion of Marvell’s Financial Advisor, Goldman Sachs & Co. LLC (beginning on page 88)

Marvell retained Goldman Sachs & Co. LLC (“Goldman Sachs”) as its financial advisor in connection with the Merger. Goldman Sachs rendered its oral opinion to the Marvell board of directors on November 18, 2017, subsequently confirmed in writing by delivery of a written opinion dated November 19, 2017, that, as of such date and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock, pursuant to the Merger Agreement, was fair to Marvell from a financial point of view.



 

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The full text of the written opinion of Goldman Sachs, dated November 19, 2017, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated into this joint proxy statement/prospectus by reference. You should read the opinion carefully in its entirety.

The Goldman Sachs opinion was provided to the Marvell board of directors and addresses only, as of the date of the opinion, the fairness, from a financial point of view to Marvell, of the Merger Consideration to be paid pursuant to, and in accordance with, the terms of the Merger Agreement by Marvell for each outstanding share of Cavium common stock, and does not address any other aspect of the Merger. The Goldman Sachs opinion is not a recommendation as to how any Marvell shareholder should vote with respect to the Marvell Share Issuance or act on any other matter and it does not in any manner address the price at which shares of Cavium common stock or Marvell common shares will trade at any time.

Goldman Sachs provided advisory services and its opinion for the information and assistance of Marvell’s board of directors in connection with its consideration of the Merger. Pursuant to an engagement letter between Marvell and Goldman Sachs, Marvell has agreed to pay Goldman Sachs a transaction fee of $22,000,000, of which $5,000,000 became payable upon execution of the Merger Agreement, and the remainder of which is contingent upon completion of the Merger.

Opinions of Cavium’s Financial Advisors, Qatalyst Partners LP and J.P. Morgan Securities LLC (beginning on page 100)

Cavium retained Qatalyst Partners LP (“Qatalyst Partners”) and J.P. Morgan Securities LLC (“J.P. Morgan”) as its financial advisors in connection with the Merger. Each of Qatalyst Partners and J.P. Morgan rendered to the Cavium board of directors its respective oral opinion on November 19, 2017, subsequently confirmed in writing, that as of such date, and based upon and subject to the considerations, limitations, factors, assumptions and other matters set forth in their respective written opinions, the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Cavium common stock, other than Marvell or any of its affiliates, was fair, from a financial point of view, to such shareholders.

The full text of each of Qatalyst Partners’ and J.P. Morgan’s written opinions, each dated as of November 19, 2017, is attached as Annex C and Annex D, respectively, to this joint proxy statement/prospectus and each is incorporated into this joint proxy statement/prospectus by reference. The written opinions set forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the reviews undertaken by each of Qatalyst Partners and J.P. Morgan in rendering each of their respective opinions. You should read each opinion carefully in its entirety.

Each of Qatalyst Partners’ and J.P. Morgan’s opinions was provided to the Cavium board of directors and each addresses only, as of the date of the opinion, the fairness, from a financial point of view, of the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Cavium common stock, other than Marvell or any of its affiliates, and neither opinion addresses any other aspect of the Merger. The opinions do not constitute recommendations as to how any Cavium shareholder should vote with respect to the Merger Proposal or act on any other matter and they do not in any manner address the price at which the shares of Cavium common stock or Marvell common shares will trade at any time.

Each of Qatalyst Partners and J.P. Morgan provided Cavium with financial advisory services in connection with the Merger. Pursuant to an engagement letter between Cavium and Qatalyst Partners and in respect of such



 

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services, Cavium has agreed to pay Qatalyst Partners approximately $38 million (provided that the final actual fee will be, in part, based on an average of Marvell’s closing share price over ten consecutive trading days up to and including the second trading day immediately preceding the Closing Date, and, accordingly, the final fee may vary significantly from this estimate), of which $150,000 became payable upon execution of the engagement letter, $3.5 million of which became payable upon delivery of its opinion and the remainder of which is contingent upon completion of the Merger. Pursuant to an engagement letter between Cavium and J.P. Morgan, Cavium has agreed to pay J.P. Morgan a transaction fee of approximately $25 million, of which $3.5 million became payable upon delivery of its opinion, and the remainder of which is contingent upon completion of the Merger.

Effect of the Merger on Cavium’s Equity Incentive Compensation Awards (beginning on page 149)

Stock Options

The Merger Agreement provides that, at the Effective Time, each outstanding stock option, whether vested or unvested (other than stock options held by non-employee members of Cavium’s board of directors who will not serve on Marvell’s board of directors following the Effective Time), will be assumed by Marvell and converted into an option to purchase, on the same terms and conditions as were applicable under such stock option, that number of Marvell common shares (rounded down to the nearest whole share) equal to the product of (a) the number of shares of Cavium common stock subject to such stock option multiplied by (b) the Conversion Ratio (as defined in “The Merger Agreement—Treatment of Cavium Equity Awards”), at an exercise price per Marvell common share (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (i) the per share exercise price for the Cavium common stock subject to such stock option, by (ii) the Conversion Ratio.

The Merger Agreement provides that, at the Effective Time, each stock option that is outstanding and vested immediately prior to the Effective Time, (including any such stock options that become vested by their terms immediately prior to or as of the Effective Time) held by non-employee members of Cavium’s board of directors who will not serve on Marvell’s board of directors following the Effective Time will be canceled, and the holder of such stock option will be entitled to receive (subject to applicable withholding or other taxes) an amount in cash equal to the product of (a) the amount (if positive) equal to (i) the Equity Award Cash Consideration (as defined in “The Merger Agreement—Treatment of Cavium Equity Awards”) minus (b) the exercise price applicable to such stock option, multiplied by (ii) the number of shares of Cavium common stock subject to such stock option. The unvested stock options held by non-employee members of Cavium’s board of directors who will not serve on Marvell’s board of directors will by their terms become vested immediately prior to or as of the Effective Time.

Restricted Stock Units

At the Effective Time, each Cavium restricted stock unit (“Cavium RSU”) that is outstanding and unvested immediately prior to the Effective Time, other than any Cavium RSU held by a non-employee member of the Cavium board of directors, will be converted into the number of Marvell restricted stock units (“Converted RSU”) (rounded down to the nearest whole share) equal to the product of (a) the number of shares of Cavium common stock subject to such Cavium restricted stock unit, multiplied by (b) the Conversion Ratio.

At the Effective Time, each Cavium RSU (a) that is outstanding and vested (and with respect to which shares of Cavium common stock have not yet been issued) immediately prior to the Effective Time (including any Cavium RSU that becomes vested by its terms immediately prior to or as of the Effective Time) or (b) that is outstanding and held by a non-employee member of the Cavium board of directors immediately prior to the Effective Time, whether vested or unvested (which awards will vest in full as of immediately prior to the Effective Time), in the case of each of clauses “(a)” or “(b),” will be canceled and extinguished, and the holder thereof will be entitled to receive (subject to applicable withholding or other taxes, which withholding will first be applied against the cash portion of the consideration paid in respect of such restricted stock units): (i) an amount in cash equal to the



 

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product of (A) the Per Share Cash Amount, multiplied by (B) the total number of shares of Cavium common stock subject to such Cavium RSU; and (ii) a number of Marvell common shares equal to the product of (A) the Exchange Ratio, multiplied by (B) the total number of shares of Cavium common stock subject to such Cavium RSU.

Performance-Based Restricted Stock Units

At the Effective Time, each Cavium performance-based restricted stock unit (“Cavium PRSU”) that is outstanding and unvested immediately prior to the Effective Time will be assumed and converted into that number of Marvell restricted stock units (each a “Converted PRSU”), rounded down to the nearest whole share, equal to the product of (a) the target number of shares of Cavium common stock subject to such Cavium PRSU, multiplied by (b) the Conversion Ratio. Such Converted PRSUs: (i) will vest based on the vesting date set forth in the award agreement applicable to such Cavium PRSU prior to the Effective Time, subject only to the continued service of the grantee with the surviving corporation in the Merger, Marvell or any of their affiliates through the applicable vesting date; (ii) will not be subject to any performance-based vesting terms following the Effective Time; and (iii) will otherwise be subject to the same terms and conditions as were applicable under such Cavium PRSUs prior to the Effective Time.

For a full description of the treatment of Cavium’s equity awards, see “The Merger Agreement—Treatment of Cavium Equity Awards.”

Voting Agreements (beginning on page 129)

Concurrently with the execution and delivery of the Merger Agreement, Syed B. Ali, Co-Founder, Chief Executive Officer and Chairman of the board of directors of Cavium, entered into a voting agreement with Marvell pursuant to which Mr. Ali agreed, among other things and subject to certain exceptions and limitations, to vote his shares of Cavium common stock, which represented approximately 2.62% of Cavium’s outstanding common stock as of November 19, 2017, the date of the voting agreement, in favor of the adoption of the Merger Agreement.

Separately, concurrently with the execution and delivery of the Merger Agreement, Starboard Value LP and certain of its affiliates, including Peter Feld, a member of Marvell’s board of directors (collectively, the “Starboard Shareholders”), entered into a voting agreement with Cavium pursuant to which the Starboard Shareholders agreed to, among other things and subject to certain exceptions and limitations, vote their Marvell common shares, which represented approximately 6.9% of Marvell’s issued common shares as of November 19, 2017, in favor of the approval of the Marvell Share Issuance.

See “The Merger—Voting Agreements” beginning on page 129 for more information.

Record Date; Outstanding Shares; Shares Entitled to Vote; Vote Required (page 50 for Marvell and page 57 for Cavium)

Marvell Shareholders

The record date for the general meeting of Marvell shareholders is February 2, 2018. This means that you must be a shareholder of record of Marvell common shares at the close of business on February 2, 2018, in order to vote at the Marvell general meeting. You are entitled to one vote for each Marvell common share you own. At the close of business on February 2, 2018, there were 495,909,755 Marvell common shares issued and entitled to vote at the Marvell general meeting.

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legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, excludes abstentions and broker non-votes, which will have no effect on the outcome of the vote on the Marvell Share Issuance. Approval of the Marvell Adjournment Proposal requires the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting, regardless of whether a quorum is present. Under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, abstentions and broker non-votes will have no effect on the outcome of the vote on the Marvell Adjournment Proposal.

Cavium Shareholders

The record date for the Cavium special meeting is February 2, 2018. This means that you must be a shareholder of record of Cavium common stock at the close of business on February 2, 2018, in order to vote at the Cavium special meeting. You are entitled to one vote for each share of Cavium common stock you own. At the close of business on February 2, 2018, there were 69,731,912 shares of Cavium common stock outstanding and entitled to vote at the Cavium special meeting and no shares of treasury stock.

The adoption of the Merger Agreement requires the affirmative vote of a majority of the outstanding shares of Cavium common stock entitled to vote at the Cavium special meeting. To approve the Cavium Adjournment Proposal, the affirmative vote of a majority of the shares of Cavium common stock present in person or represented by proxy and entitled to vote at the Cavium special meeting is required, regardless of whether a quorum is present. To approve the Cavium Non-Binding Compensation Proposal, the affirmative vote of a majority of the shares of Cavium common stock present in person or represented by proxy and entitled to vote at the Cavium special meeting is required, assuming a quorum is present.

Share Ownership and Voting by Marvell’s and Cavium’s Directors and Executive Officers (page 51 for Marvell and page 58 for Cavium)

Marvell. At the close of business on the record date for the Marvell general meeting, Marvell’s directors and executive officers had the right to vote approximately 34,168,030 Marvell common shares at the Marvell general meeting, collectively representing approximately 6.9% of Marvell common shares issued and entitled to vote at the Marvell general meeting.

Cavium. At the close of business on the record date for the Cavium special meeting, Cavium’s directors and executive officers had the right to vote approximately 2,303,909 shares of Cavium common stock at the Cavium special meeting, collectively representing approximately 3.3% of Cavium common stock outstanding.

Interests of Cavium Directors and Executive Officers in the Merger (beginning on page 122)

Cavium’s executive officers and members of its board of directors, in their capacities as such, have financial interests in the Merger that may be different from, or in addition to, their interests as shareholders and the interests of shareholders of Cavium generally. The members of Cavium’s board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, and in recommending to the Cavium shareholders that the Merger Agreement be adopted. These interests are discussed in more detail in the section entitled “The Merger—Interests of Cavium Directors and Executive Officers in the Merger.” In addition, the Merger Agreement provides that Marvell will cause the Chairman of the board of directors of Cavium and two other members of the Cavium board of directors to be designated by Marvell to become members of the Marvell board of directors as of the Effective Time. Anil Jain, Corporate Vice President of Cavium, and M. Raghib Hussain, Chief Operating Officer of Cavium, will each become officers of Marvell upon completion of the Merger. Marvell expects that all of the directors of Marvell will continue to serve as members of the board of directors of Marvell after the Effective Time.



 

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Listing of Marvell Common Shares and Delisting and Deregistration of Cavium Common Stock (beginning on page 135)

Under the Merger Agreement, Marvell and Cavium have agreed to use their respective reasonable best efforts to take all actions required to be taken under applicable securities laws in connection with the issuance, exchange, and listing of Marvell common shares to be issued to Cavium shareholders in connection with the Merger. The authorization and approval for listing of such shares on NASDAQ, subject to official notice of issuance, is a condition to the obligation of each of Marvell, Merger Sub and Cavium to complete the Merger. The Marvell common shares to be issued in connection with the Merger will trade under the symbol “MRVL” and will be fully fungible with the Marvell common shares currently trading under that symbol.

Shares of Cavium common stock are currently traded on NASDAQ under the symbol “CAVM.” Under the Merger Agreement, Cavium has agreed to, prior to the Effective Time, cooperate with Marvell and use its reasonable best efforts to take all actions reasonably necessary, proper or advisable to enable the Cavium common stock to be delisted from NASDAQ and deregistered under the Exchange Act as promptly as practicable after the Merger is completed. After such time, Cavium will no longer be a public company and will no longer file periodic and other reports with the SEC.

Rights of Appraisal for Cavium Shareholders (beginning on page 135)

Under Section 262 of the DGCL, holders of Cavium common stock may have the right to obtain an appraisal of the value of their shares of Cavium common stock in connection with the Merger. Shares of Cavium common stock held by shareholders of Cavium who have properly exercised appraisal rights under Section 262 of the DGCL (and have not withdrawn such exercise or lost such rights) will not be converted into the right to receive the Merger Consideration, but will instead be converted into the right to receive payment in cash for the fair value of their shares of Cavium common stock as determined in accordance with Section 262 of the DGCL. The fair value of shares of common stock of Cavium as determined in accordance with Section 262 of the DGCL may be more or less than (or the same as) the Merger Consideration. Shareholders who wish to exercise appraisal rights must comply fully with all applicable requirements of Section 262 of the DGCL, which is summarized in this joint proxy statement/prospectus and attached as Annex E to this joint proxy statement/prospectus. Failure to follow exactly the procedures specified under Section 262 of the DGCL may result in the loss of appraisal rights. Because of the complexity of Section 262 of the DGCL relating to appraisal rights, if you are considering exercising your appraisal rights, Marvell and Cavium encourage you to seek the advice of your own legal counsel. A summary of the requirements under Delaware law to exercise appraisal rights is included in this joint proxy statement/prospectus in “The Merger—Rights of Appraisal for Cavium Shareholders” and the text of Section 262 of the DGCL as in effect with respect to this transaction is included as Annex E to this joint proxy statement/prospectus.

No Rights of Appraisal for Marvell Shareholders (beginning on page 139)

Holders of Marvell common shares will not have any rights of appraisal as a result of the Merger.

Conditions to Completion of the Merger (beginning on page 174)

The obligations of Marvell and Merger Sub to complete the Merger will be subject to the satisfaction (or waiver by Marvell, on behalf of itself and Merger Sub), at or prior to the completion of the Merger, of each of the following conditions:

 

    the Cavium shareholders have adopted the Merger Agreement and the Marvell shareholders have approved the Marvell Share Issuance;


 

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    subject to certain materiality qualifiers, the accuracy of the representations and warranties made by Cavium in the Merger Agreement and the receipt of a certificate executed on behalf of Cavium by its Chief Executive Officer and Chief Financial Officer confirming, to the knowledge of such officer, such accuracy;

 

    the obligations in the Merger Agreement that Cavium is required to comply with or to perform at or prior to the completion of the Merger have been complied with and performed in all material respects, and the receipt of a certificate executed on behalf of Cavium by its Chief Executive Officer and Chief Financial Officer confirming, to the knowledge of such officer, such compliance and performance;

 

    the registration statement of which this joint proxy statement/prospectus is a part has become effective in accordance with the provisions of the Securities Act;

 

    since the date of the Merger Agreement, there has not occurred any Material Adverse Effect (as defined below in “The Merger Agreement—Representations and Warranties”) on Cavium and its subsidiaries that is continuing;

 

    the waiting period applicable to the completion of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), has expired or been terminated without the imposition of a Burdensome Condition (as defined below in “The Merger Agreement—Efforts to Complete the Merger”) and any similar waiting period under any applicable antitrust or competition-related law or regulation or other legal requirement in Poland has expired or been terminated without the imposition of a Burdensome Condition;

 

    CFIUS Approval (as defined below in “The Merger Agreement—Regulatory Approvals Required for the Merger”) has been obtained;

 

    approval of the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) has been obtained without the imposition of a Burdensome Condition;

 

    any other governmental authorization or other consent required under any applicable foreign antitrust or competition-related law or regulation or other legal requirement in the United States, the People’s Republic of China or Poland has been obtained without the imposition of a Burdensome Condition;

 

    the Marvell common shares to be issued in the Merger are authorized and approved for listing (subject to official notice of issuance) on NASDAQ;

 

    no temporary restraining order, preliminary or permanent injunction or other binding order preventing the completion of the Merger has been issued by any Specified Governmental Body (as defined below in “The Merger Agreement—Conditions to Completion of the Merger”) and is still in effect, and there is no legal requirement enacted or deemed applicable to the Merger by any Specified Governmental Body that makes completion of the Merger illegal and is still in effect; and

 

    there is no pending or overtly threatened legal proceeding brought by a governmental body: (a) challenging or seeking to restrain or prohibit the completion of the Merger or any of the transactions contemplated by the Merger Agreement; (b) seeking to prohibit or limit in any material respect Marvell’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the shares of the surviving corporation in the Merger; (c) that could materially and adversely affect the right of Marvell or Cavium or any of its subsidiaries to own the assets or operate the business of Cavium and its subsidiaries; (d) seeking to compel Cavium or Marvell or any of their respective subsidiaries to dispose of or hold separate any material assets as a result of the Merger or any of the other transactions contemplated by the Merger Agreement; or (e) relating to the Merger or any of the other transactions contemplated by the Merger Agreement and seeking to impose (or that would reasonably be expected to result in the imposition of) any criminal sanctions or criminal liability on Marvell, Cavium or any of Cavium’s subsidiaries, or any of the officers, directors or affiliates of Marvell or Cavium or any of Cavium’s subsidiaries.


 

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The obligations of Cavium to complete the Merger will be subject to the satisfaction (or waiver by Cavium), at or prior to the completion of the Merger, of the following conditions:

 

    the Cavium shareholders have adopted the Merger Agreement and the Marvell shareholders have approved the Marvell Share Issuance;

 

    subject to certain materiality qualifiers, the accuracy of the representations and warranties made by Marvell and Merger Sub in the Merger Agreement, and the receipt of a certificate executed on behalf of Marvell by its Chief Executive Officer and Chief Financial Officer confirming, to the knowledge of such officer, such accuracy;

 

    the obligations in the Merger Agreement that Marvell and Merger Sub are required to comply with or to perform at or prior to the completion of the Merger have been complied with and performed in all material respects, and the receipt of a certificate executed on behalf of Marvell by its Chief Executive Officer and Chief Financial Officer confirming, to the knowledge of such officer, such compliance and performance;

 

    the registration statement of which this joint proxy statement/prospectus is a part has become effective in accordance with the provisions of the Securities Act;

 

    since the date of the Merger Agreement, there has not occurred any Material Adverse Effect on Marvell that is continuing;

 

    the waiting period applicable to the completion of the Merger under the HSR Act has expired or been terminated;

 

    the Marvell common shares to be issued in the Merger are authorized and approved for listing (subject to official notice of issuance) on NASDAQ;

 

    no temporary restraining order, preliminary or permanent injunction or other order preventing the completion of the Merger has been issued by any court of competent jurisdiction in the United States and is still in effect, and there is no legal requirement enacted or deemed applicable to the Merger by any federal or state governmental body in the United States that makes completion of the Merger illegal and is still in effect; and

 

    no temporary restraining order, preliminary or permanent injunction or other binding order preventing the completion of the Merger has been issued by any court of competent jurisdiction (other than a court in the United States) and is still in effect, and there is no legal requirement enacted or deemed applicable to the Merger (other than a legal requirement enacted in the United States) that makes completion of the Merger illegal and is still in effect, except for any such order, decree, ruling or legal requirement that would not reasonably be expected to give rise to the imposition of criminal sanctions or criminal liability on the officers and directors of Cavium if the Merger were completed.

Regulatory Approvals Required for the Merger (beginning on page 132)

The completion of the Merger is subject to compliance with the HSR Act. Marvell and Cavium filed the notifications required under the HSR Act with the Premerger Notification Office of the Federal Trade Commission and the Antitrust Division of the Department of Justice on December 27, 2017.

The completion of the Merger is also subject to compliance with applicable foreign antitrust laws. Under the Merger Agreement, the parties have agreed to provide applicable notifications under the antitrust laws of the People’s Republic of China and Poland.

Under the Merger Agreement, each of Marvell and Cavium has agreed to use reasonable best efforts, subject to specified limitations, to take, or cause to be taken, all actions necessary to complete the Merger and make



 

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effective the other transactions contemplated by the Merger Agreement, including obtaining CFIUS Approval and MOFCOM approval. See “The Merger Agreement—Efforts to Complete the Merger” and “The Merger Agreement—Conditions to Completion of the Merger” for more information.

No Solicitation or Discussions by Cavium (beginning on page 157)

Under the Merger Agreement, Cavium has agreed that, subject to certain exceptions, it will not, directly or indirectly, and will ensure that each of its subsidiaries does not, and will use its reasonable best efforts to cause its and their respective representatives not to, directly or indirectly:

 

    solicit, initiate, knowingly encourage, knowingly induce or knowingly facilitate the making, submission or announcement of any Cavium Acquisition Proposal (as defined in “The Merger Agreement—No Solicitation or Discussions by Cavium”) or Cavium Acquisition Inquiry (as defined in “The Merger Agreement—No Solicitation or Discussions by Cavium”), including by approving any transaction, or approving any person or entity (other than Marvell and its affiliates) becoming an “interested stockholder” for purposes of Section 203 of the DGCL;

 

    furnish or otherwise provide access to any information regarding Cavium or any of its subsidiaries to any person or entity in response to a Cavium Acquisition Proposal or Cavium Acquisition Inquiry;

 

    engage in discussions or negotiations with any person or entity with respect to any Cavium Acquisition Proposal;

 

    approve, endorse or recommend any Cavium Acquisition Proposal;

 

    enter into any letter of intent or similar document or any contract contemplating or otherwise relating to any Acquisition Transaction (as defined in “The Merger Agreement—No Solicitation or Discussions by Cavium”), other than certain confidentiality agreements expressly permitted under the Merger Agreement; or

 

    publicly propose to do any of the foregoing.

The Merger Agreement provides, however, that prior to the adoption of the Merger Agreement by Cavium shareholders, Cavium may, under certain specified circumstances and subject to certain conditions, furnish nonpublic information regarding Cavium and its subsidiaries to, or enter into discussions or negotiations with, any person or entity who submits (and does not withdraw) a Cavium Acquisition Proposal. Under the Merger Agreement, Cavium has also agreed to promptly (and in no event later than 24 hours after receipt thereof) advise Marvell orally and in writing of any Cavium Acquisition Proposal or Cavium Acquisition Inquiry or any related request for nonpublic information relating to Cavium or any its subsidiaries that is made or submitted by any person or entity during the period from the date of the Merger Agreement through the Effective Time.

For further information, see “The Merger Agreement—No Solicitation or Discussions by Cavium.

No Solicitation or Discussions by Marvell (beginning on page 159)

Under the Merger Agreement, Marvell has agreed, subject to certain exceptions, that it will not, directly or indirectly, and will ensure that each of its subsidiaries does not, and will use its reasonable best efforts to cause its and their respective representatives not to, directly or indirectly:

 

    solicit, initiate, encourage, induce or facilitate the making, submission or announcement of any Marvell Acquisition Proposal (as defined in “The Merger Agreement—No Solicitation or Discussions by Marvell”) or Marvell Acquisition Inquiry (as defined in “The Merger Agreement—No Solicitation or Discussions by Marvell”);


 

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    furnish or otherwise provide access to any information regarding Marvell or any of its subsidiaries to any person or entity in response to a Marvell Acquisition Proposal or Marvell Acquisition Inquiry;

 

    engage in discussions or negotiations with any person or entity with respect to any Marvell Acquisition Proposal;

 

    approve, endorse or recommend any Marvell Acquisition Proposal;

 

    enter into any letter of intent or similar document or any contract contemplating or otherwise relating to any Acquisition Transaction, other than certain confidentiality agreements expressly permitted under the Merger Agreement; or

 

    publicly propose to do any of the foregoing.

The Merger Agreement provides, however, that Marvell may, prior to the approval of the Marvell Share Issuance by Marvell shareholders, under certain specified circumstances and subject to certain conditions, furnish nonpublic information regarding Marvell or any of its subsidiaries to, or enter into discussions or negotiations with, any person or entity who submits (and does not withdraw) a Marvell Acquisition Proposal. Under the Merger Agreement, Marvell has also agreed to promptly (and in no event later than 24 hours after receipt thereof) advise Cavium orally and in writing of any Marvell Acquisition Proposal or Marvell Acquisition Inquiry or any related request for nonpublic information relating to Marvell or any its subsidiaries that is made or submitted by any person or entity during the period from the date of the Merger Agreement through the Effective Time.

For more information, see “The Merger Agreement—No Solicitation or Discussions by Marvell.

Termination of the Merger Agreement (beginning on page 177)

The Merger Agreement may be terminated by the mutual written consent of Marvell and Cavium, and under certain circumstances, by either Marvell or Cavium.

Termination Fees (beginning on page 180)

The Merger Agreement provides that, in certain circumstances, the Cavium board of directors has the right to terminate the Merger Agreement in order to enter into a definitive agreement relating to a superior offer, as further described in “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation.” In that event, the Merger Agreement provides that Cavium pay Marvell a termination fee of $180 million. See “The Merger Agreement—Transaction Expenses and Termination Fees.”

The Merger Agreement provides that, in certain circumstances, the Marvell board of directors has the right to terminate the Merger Agreement in order to enter into a definitive agreement relating to a superior offer, as further described in “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation.” In that event, the Merger Agreement provides that Marvell pay Cavium a termination fee of $180 million. In addition, the Merger Agreement provides that Marvell will be required to pay Cavium a termination fee of $50 million if, under certain specified circumstances, MOFCOM approval has not been obtained and the Merger Agreement is terminated. See “The Merger Agreement—Transaction Expenses and Termination Fees.” The Merger Agreement also provides that Marvell will be required to pay Cavium a termination fee of $180 million if, under certain specified circumstances, CFIUS Approval has not been obtained and the Merger Agreement is terminated. See “The Merger Agreement—Transaction Expenses and Termination Fees.”



 

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Litigation Related to the Merger (beginning on page 133)

Five putative class actions challenging the Merger have been filed on behalf of Cavium shareholders against Cavium, its board of directors and, in two instances, Marvell. Each of the lawsuits alleges that the registration statement on Form S-4 authorized by Cavium and Marvell, and filed by Marvell with the SEC on December 21, 2017, failed to disclose certain material information that rendered certain statements contained therein incomplete and misleading. The complaints seek to enjoin the parties from proceeding with a shareholder vote on the Merger. Marvell and Cavium believe the allegations and claims asserted in the five putative class actions are without merit. For more information, see “The Merger—Litigation Related to the Merger.”

Material United States Federal Income Tax Consequences (beginning on page 141)

The exchange of Cavium common stock in the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “The Merger—Material United States Federal Income Tax Consequences”) of Cavium common stock who receives Merger Consideration in exchange for such U.S. holder’s shares of Cavium common stock generally will recognize taxable gain or loss in an amount equal to the difference, if any, between the fair market value of the Merger Consideration received and such U.S. holder’s adjusted tax basis in the shares of Cavium common stock exchanged therefor.

THIS JOINT PROXY STATEMENT/PROSPECTUS CONTAINS A GENERAL DESCRIPTION OF THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO U.S. HOLDERS. THIS DESCRIPTION NEITHER ADDRESSES ANY NON-U.S. TAX CONSEQUENCES NOR DOES IT PERTAIN TO STATE, LOCAL OR OTHER TAX CONSEQUENCES. CONSEQUENTLY, YOU ARE URGED TO CONTACT YOUR OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO YOU OF THE MERGER.

Accounting Treatment (beginning on page 139)

The Merger will be accounted for as a business combination using the acquisition method of accounting with Marvell as the accounting acquiror. Marvell’s shareholders immediately prior to the Effective Time will continue to own the majority of Marvell common shares after the completion of the Merger.

Risk Factors (beginning on page 25)

In deciding how to vote your Marvell common shares or Cavium common stock, you should read carefully this entire joint proxy statement/prospectus, including the documents incorporated by reference herein and the Annexes hereto, and especially consider the factors discussed in “Risk Factors.” These risk factors should be considered along with the additional risk factors contained in the periodic reports of Marvell and Cavium filed with the SEC.

Comparison of Rights of Shareholders (beginning on page 187)

As a result of the Merger, the holders of Cavium common stock will become holders of Marvell common shares and their rights will be governed by the Bermuda Companies Act of 1981, as amended (the “Companies Act”), and by Marvell’s Memorandum of Association, as presently in effect (the “Memorandum of Association”), and Marvell’s Fourth Amended and Restated Bye-laws (the “Bye-laws”). Following the Merger, Cavium shareholders will have different rights as shareholders of Marvell than they had as shareholders of Cavium. For a summary of the material differences between the rights of Marvell shareholders and Cavium shareholders, see “Comparison of Rights of Shareholders” for more information.



 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, the shareholders of Marvell and Cavium should carefully consider the following risk factors in determining how to vote on the respective proposals of Marvell and Cavium. The risks associated with the business of Marvell can be found in Marvell’s Exchange Act reporting, including Marvell’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017 and its Quarterly Reports on Form 10-Q for the quarterly periods ended April 29, 2017, July 29, 2017 and October 28, 2017, which are incorporated by reference in this joint proxy statement/prospectus. The risks associated with the business of Cavium can be found in Cavium’s Exchange Act reporting, including the Cavium Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and its Quarterly Reports on Form 10-Q for the fiscal quarters ended on March 31, 2017, June 30, 2017 and September 30, 2017, which are incorporated by reference in this joint proxy statement/prospectus. See “Documents Incorporated by Reference” beginning on page 238.

Risk Factors Relating to the Merger

Because the market price of Marvell common shares will fluctuate, the market value of the Marvell common shares to be issued in connection with the Merger will not be known until completion of the Merger.

Upon completion of the Merger, each share of Cavium common stock outstanding immediately prior to the Merger will be converted into the right to receive (a) 2.1757 Marvell common shares and (b) $40.00 in cash, without interest. There will be no adjustment to the Exchange Ratio due to changes in the market price of either shares of Cavium common stock or Marvell common shares and the Merger Agreement does not provide for any price-based termination right. The value of the Marvell common shares to be issued in the Merger could be considerably higher or lower than they were at the time the Exchange Ratio was negotiated, on the date of this joint proxy statement/prospectus or the dates of the shareholder meetings.

Accordingly, on the dates of the shareholder meetings, shareholders of each of Marvell and Cavium will not know or be able to calculate the exact market value of the Marvell common shares that would be issued upon completion of the Merger.

Share price changes may result from numerous factors, including changes in the respective business operations and prospects of Marvell and Cavium, changes in general market and economic conditions, and regulatory considerations. Many of these factors are beyond the control of Marvell or Cavium.

The market price of Marvell common shares after the Merger might be affected by factors different from, or in addition to, those currently affecting the respective market prices of Marvell common shares and Cavium common stock.

The businesses of Marvell and Cavium differ and, accordingly, the results of operations of Marvell and the market price of Marvell common shares after the Merger may be affected by factors different from, or in addition to, those currently affecting the independent results of operations of each of Marvell and Cavium. For a discussion of the businesses of Marvell and Cavium and of factors to consider in connection with those businesses, see the documents incorporated by reference into this joint proxy statement/prospectus and referred to under “Documents Incorporated by Reference.”

Until the completion of the Merger or the termination of the Merger Agreement in accordance with its terms, Marvell and Cavium are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Marvell or Cavium and their respective shareholders.

Until the Merger is completed or the Merger Agreement is terminated, the Merger Agreement restricts Marvell and Cavium from taking specified actions without the consent of the other party, and requires Cavium to conduct

 

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its business and operations in the ordinary course in all material respects and substantially in accordance with past practices. These restrictions may prevent Marvell and Cavium from making appropriate changes to their respective businesses or pursuing attractive business opportunities that may arise prior to the completion of the Merger. See “The Merger Agreement—Interim Operations of Marvell and Cavium” for a description of the restrictive covenants applicable to Marvell and Cavium.

The Merger Agreement limits each of Marvell’s and Cavium’s ability to pursue alternative transactions, and in certain instances requires payment of a termination fee, which could deter a third party from proposing an alternative transaction.

The Merger Agreement contains provisions that, subject to certain exceptions, limit each of Marvell’s and Cavium’s ability to solicit, initiate, encourage or facilitate, or enter into discussions or negotiations with respect to, any inquiries regarding or the making of any proposal or offer that constitutes or could reasonably be expected to lead to an alternative transaction. See “The Merger Agreement—No Solicitation or Discussions by Marvell” and “The Merger Agreement—No Solicitation or Discussions by Cavium” for more information. In addition, under specified circumstances, Marvell or Cavium is required to pay a termination fee of $180 million if the Merger Agreement is terminated. See “The Merger Agreement—Transaction Expenses and Termination Fees” for a more detailed description of these circumstances. It is possible that these or other provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Marvell or Cavium from considering or proposing an acquisition or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Marvell or Cavium than it might otherwise have proposed to pay.

The Merger is subject to a number of conditions, some of which are outside of the parties’ control, and if these conditions are not satisfied or waived, the Merger will not be completed.

The Merger Agreement contains a number of conditions that must be satisfied (or waived) prior to completion of the Merger. Those conditions include, among other conditions:

 

    adoption by Cavium shareholders of the Merger Agreement;

 

    approval by Marvell shareholders of the Marvell Share Issuance;

 

    there being no binding order issued by certain governmental entities enjoining or otherwise prohibiting completion of the Merger that remains in effect;

 

    there being no legal requirement enacted by certain governmental entities making the completion of the Merger illegal that remains in effect;

 

    receipt of certain required regulatory approvals;

 

    authorization and approval for listing on NASDAQ of the Marvell common shares to be issued in connection with the Merger;

 

    accuracy of representations and warranties of the parties to the applicable standard provided by the Merger Agreement;

 

    there being no Material Adverse Effect on Marvell or Cavium and its subsidiaries that is continuing;

 

    compliance with and performance by the parties of their respective covenants in the Merger Agreement in all material respects; and

 

    effectiveness of the registration statement of which this joint proxy statement/prospectus is a part, as well as other customary closing conditions.

The required satisfaction or waiver of the foregoing conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring at all. Any delay in completing the Merger could cause the

 

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combined company not to realize some or all of the benefits that the parties expect the combined company to achieve. Further, there can be no assurance that the conditions to the completion of the Merger will be satisfied or waived or that the Merger will be completed.

In addition, if the Merger is not completed by September 19, 2018 (subject to a potential extension to November 19, 2018 under certain circumstances, including in the event receipt of certain required regulatory approvals have not been obtained), either Marvell or Cavium may choose to terminate the Merger Agreement. Marvell or Cavium may also elect to terminate the Merger Agreement in certain other circumstances, or they may mutually decide to terminate the Merger Agreement at any time prior to the Effective Time, before or after obtaining shareholder approval, as applicable. See “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Transaction Expenses and Termination Fees” for a more detailed description of these circumstances.

The Merger is subject to the expiration of applicable waiting periods under, and the receipt of approvals, consents or clearances from, certain domestic and foreign regulatory authorities that may impose conditions that could have an adverse effect on Marvell, Cavium or the combined company or prevent completion of the Merger.

The Merger is subject to the expiration of applicable waiting periods and the receipt of approvals, consents and clearances from both the United States and foreign regulatory authorities. In deciding whether to grant the required regulatory approval, consent or clearance, each relevant governmental entity will consider the effect of the Merger on competition within its jurisdiction. The terms and conditions of the approvals, consents and clearances that are granted may impose requirements, limitations or costs or place restrictions on the conduct of the combined company’s business which may adversely affect the financial position and prospects of the combined company and its ability to achieve the cost savings and other synergies projected to result from the Merger.

In addition, neither Marvell nor Cavium can provide assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Merger. For a more detailed description of the regulatory review process, see the sections entitled “The Merger—Regulatory Approvals Required for the Merger,” “The Merger Agreement—Efforts to Complete the Merger” and “The Merger Agreement—Conditions to Completion of the Merger.”

The Merger is subject to the receipt of CFIUS Approval that may impose measures to protect U.S. national security or other conditions that could have an adverse effect on Marvell, Cavium, or the combined company, or, if not obtained, could prevent completion of the Merger.

Marvell’s obligation to complete the Merger is conditioned on obtaining CFIUS Approval. In deciding whether to grant CFIUS Approval, CFIUS will consider the effect of the Merger on U.S. national security. As a condition to granting CFIUS Approval, CFIUS may take measures and impose conditions, certain of which (a) could materially and adversely affect the combined company’s operating results due to the imposition of requirements, limitations or costs or the placement of restrictions on the conduct of the combined company’s business and (b) could adversely affect the financial position and prospects of the combined company and its ability to achieve the cost savings and other synergies projected to result from the Merger. There can be no assurance that CFIUS will not impose conditions, terms, obligations or restrictions, or that such conditions, terms, obligations or restrictions will not have the effect of delaying completion of the Merger or imposing additional material costs on, or materially limiting the revenues of, the combined company following the Merger. For a more detailed description of the regulatory review process, see the sections entitled “The Merger—Regulatory Approvals Required for the Merger” and “The Merger Agreement—Efforts to Complete the Merger,” and “The Merger Agreement—Conditions to Completion of the Merger.”

 

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Any delay in completing the Merger may significantly reduce the benefits expected to be obtained from the Merger.

In addition to the required regulatory clearances and approvals, the Merger is subject to a number of other conditions that are beyond the control of Marvell and Cavium and that may prevent, delay or otherwise materially adversely affect completion of the Merger. Marvell and Cavium cannot predict whether and when these other conditions will be satisfied. Further, the requirements for obtaining the required regulatory clearances and approvals could delay the completion of the Merger for a significant period of time or prevent it from occurring. Any delay in completing the Merger may significantly reduce the synergies projected to result from the Merger and other benefits that Marvell and Cavium expect to achieve if they complete the Merger within the expected timeframe and integrate their respective businesses. See “The Merger Agreement—Conditions to Completion of the Merger” for more information.

The business relationships of Marvell and Cavium and their respective subsidiaries may be subject to disruption due to uncertainty associated with the Merger, which could have an adverse effect on the results of operations, cash flows and financial position of Marvell, Cavium and, following the completion of the Merger, the combined company.

Parties with which Marvell and Cavium do business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with Marvell, Cavium or the combined company. Marvell’s and Cavium’s relationships may be subject to disruption as customers, suppliers and other persons with whom Marvell and Cavium have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with Marvell or Cavium, as applicable, or consider entering into business relationships with parties other than Marvell, Cavium or the combined company. These disruptions could have an adverse effect on the results of operations, cash flows and financial position of Marvell, Cavium and, following the completion of the Merger, the combined company, including an adverse effect on Marvell’s ability to realize the expected synergies and other benefits of the Merger. The risk, and adverse effect, of any disruption could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.

Some of Cavium’s executive officers and directors may have interests in the Merger that are different from, or in addition to, the interests of Cavium shareholders.

When considering the recommendations of the Cavium board of directors with respect to the Merger, Cavium shareholders should be aware that the directors and executive officers of Cavium have interests in the Merger that may be different from, or in addition to, their interests as shareholders and the interests of shareholders of Cavium generally. These interests include, among others, potential payments under employment agreements and change in control severance agreements, rights to acceleration of vesting and exercisability of options, and acceleration of vesting of restricted stock units as a result of the Merger and rights to ongoing indemnification and insurance coverage for acts or omissions occurring prior to the Merger. See “The Merger—Interests of Cavium Directors and Executive Officers in the Merger” for more information.

As a result of these interests, these directors and executive officers of Cavium might be more likely to support and to vote in favor of the proposals described in this joint proxy statement/prospectus than if they did not have these interests. Each of Cavium’s shareholders should consider whether these interests might have influenced these directors and executive officers to support or recommend voting for the proposals related to the Merger. As of the close of business on January 19, 2018, Cavium directors and executive officers were entitled to vote approximately 3.09% of the then-outstanding shares of Cavium common stock. See “The Merger—Share Ownership of Directors and Executive Officers of Cavium” for more information.

 

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There can be no assurance that Marvell will be able to secure the funds necessary to pay the cash portion of the Merger Consideration and refinance certain of Cavium’s existing indebtedness on acceptable terms, in a timely manner or at all.

Marvell intends to fund the cash portion of the Merger Consideration to be paid to holders of Cavium common stock with a combination of Marvell’s and Cavium’s cash on hand and debt financing. To this end, Marvell has entered into a debt commitment letter containing commitments as of the date of this joint proxy statement/prospectus for a $900 million term loan facility and an $850 million bridge loan facility. However, as of the date of this joint proxy statement/prospectus, neither Marvell nor any of its subsidiaries has entered into definitive agreements for the debt financing (or other financing arrangements in lieu thereof), and the obligation of the lenders to provide the debt financing under the debt commitment letter is subject to a number of customary conditions. There can be no assurance that Marvell will be able to obtain the debt financing pursuant to the debt commitment letter.

In the event that the debt financing contemplated by the debt commitment letter is not available, other financing may not be available on acceptable terms, in a timely manner or at all. If Marvell is unable to obtain debt financing, the Merger may be delayed or not be completed.

Failure to complete the Merger could negatively impact the share price and the future business and financial results of Marvell and Cavium.

If the Merger is not completed for any reason, the ongoing businesses of Marvell and Cavium may be adversely affected and, without realizing any of the benefits of having completed the Merger, Marvell and Cavium would be subject to a number of risks, including the following:

 

    Marvell and Cavium may experience negative reactions from the financial markets, including negative impacts on their respective share prices;

 

    Marvell and Cavium may experience negative reactions from their respective customers, strategic partners, suppliers, licensees, other business partners, regulators and employees;

 

    there may be disruptions to Marvell’s and Cavium’s respective businesses resulting from the announcement and pendency of the Merger, and any adverse changes in their relationships with their respective customers, strategic partners, suppliers, licensees, other business partners and employees may continue or intensify;

 

    Marvell and Cavium will be required to pay certain costs relating to the Merger whether or not the Merger is completed;

 

    Marvell and Cavium may not have been able to take advantage of alternative business opportunities or effectively respond to competitive pressures; and

 

    Marvell and Cavium will have committed substantial time and resources to matters relating to the Merger (including integration planning) which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to either Marvell or Cavium as an independent company.

In addition to the above risks, Marvell or Cavium may be required, under certain circumstances in connection with a termination of the Merger Agreement, to pay the other party a termination fee of up to $180 million, which may materially adversely affect the paying party’s financial results. Further, Marvell and Cavium are currently parties to various claims and litigation related to this registration statement and could be subject to additional litigation related to the Merger (or any failure to complete the Merger) or to a proceeding commenced against Marvell or Cavium to enforce performance of their respective obligations under the Merger Agreement. If the Merger is not completed, these risks may materialize and may adversely affect Marvell’s and Cavium’s respective businesses, financial condition, financial results and share prices.

 

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Litigation filed against Marvell and/or Cavium could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.

Marvell, Cavium and members of Cavium’s board of directors currently are and may in the future be parties, among others, to various claims and litigation related to the Merger Agreement and the Merger, including putative shareholder class actions. For additional information regarding the pending litigation, please see the section entitled “The Merger—Litigation Related to the Merger.” Among other remedies, the plaintiffs in such matters are seeking to enjoin the Merger. The results of complex legal proceedings are difficult to predict, and could delay or prevent the Merger from becoming effective in a timely manner. The existence of litigation relating to the Merger could impact the likelihood of obtaining the required approvals from either Marvell’s or Cavium’s shareholders. Moreover, the pending litigation and any future additional litigation could be time consuming and expensive, could divert Marvell’s and Cavium’s management’s attention away from their regular businesses, and, if any one of these lawsuits is adversely resolved against either Marvell or Cavium, could have a material adverse effect on Marvell’s or Cavium’s respective financial condition.

One of the conditions to Cavium’s obligation to complete the Merger is that no temporary restraining order, preliminary or permanent injunction or other binding order preventing the completion of the Merger shall have been issued by any court of competent jurisdiction in the United States and remain in effect. Similarly, one of the conditions to Marvell’s obligation to complete the Merger is that no temporary restraining order, preliminary or permanent injunction or other binding order preventing the completion of the Merger shall have been issued by any court of any specified jurisdiction and remain in effect. Marvell’s obligations to complete the Merger is also conditioned on, among other things, there being no pending or overtly threatened legal proceeding brought by a governmental body (a) challenging or seeking to restrain or prohibit the completion of the Merger or any of the transactions contemplated by the Merger Agreement; (b) seeking to prohibit or limit in any material respect Marvell’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of the surviving corporation in the Merger; (c) that could materially and adversely affect the right of Marvell or Cavium or any of its subsidiaries to own the assets or operate the business of Cavium and its subsidiaries; (d) seeking to compel Cavium or Marvell or any of their respective subsidiaries to dispose of or hold separate any material assets as a result of the Merger or any of the other transactions contemplated by the Merger Agreement; or (e) relating to the Merger or any of the other transactions contemplated by the Merger Agreement and seeking to impose (or that would reasonably be expected to result in the imposition of) any criminal sanctions or criminal liability on Marvell or Cavium or any of Cavium’s subsidiaries or any of the officers, directors or affiliates of Marvell or Cavium or any of Cavium’s subsidiaries.

Consequently, if a settlement or other resolution is not reached in the potential lawsuits referenced above and the plaintiffs secure injunctive or other relief prohibiting, delaying or otherwise adversely affecting Marvell’s or Cavium’s ability to complete the Merger on the terms contemplated by the Merger Agreement, or there is a pending or overtly threatened legal proceeding brought by a governmental party as described above, then the Merger may not become effective in a timely manner or at all.

Risk Factors Relating to the Combined Company Following the Merger

Marvell may fail to realize the benefits expected from the Merger, which could adversely affect Marvell’s share price.

The anticipated benefits Marvell expects from the Merger are, necessarily, based on projections and assumptions about the combined businesses of Marvell and Cavium, which may not materialize as expected or which may prove to be inaccurate. The value of Marvell common shares following the completion of the Merger could be adversely affected if Marvell is unable to realize the anticipated benefits from the Merger on a timely basis or at all. Achieving the benefits of the Merger will depend, in part, on Marvell’s ability to integrate the business and operations of Cavium successfully and efficiently with Marvell’s business. The challenges involved in this integration, which will be complex and time-consuming, include the following:

 

    difficulties entering new markets or manufacturing in new geographies where Marvell has no or limited direct prior experience;

 

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    successfully managing relationships with Marvell and Cavium’s combined supplier and customer base;

 

    coordinating and integrating independent research and development and engineering teams across technologies and product platforms to enhance product development while reducing costs;

 

    coordinating sales and marketing efforts to effectively position the combined company’s capabilities and the direction of product development;

 

    combining product offerings and product lines and developing interoperability between the products of Marvell and Cavium;

 

    limitations or restrictions required by regulatory authorities on the ability of management of Marvell and of Cavium to conduct planning regarding the integration of the two companies;

 

    difficulties in integrating the systems and process of two companies with complex operations;

 

    the increased scale and complexity of Marvell’s operations resulting from the Merger;

 

    retaining key employees of Marvell and Cavium;

 

    obligations that Marvell will have to counterparties of Cavium that arise as a result of the change in control of Cavium; and

 

    the diversion of management attention from other important business objectives.

If Marvell does not successfully manage these issues and the other challenges inherent in integrating an acquired business of the size and complexity of Cavium, then Marvell may not achieve the anticipated benefits of the Merger on a timely basis or at all and Marvell’s revenue, expenses, operating results and financial condition could be materially adversely affected.

Marvell may be unable to realize anticipated cost synergies and expects to incur substantial expenses related to the Merger, which could have a material adverse effect on Marvell’s business, financial condition and results of operations.

Marvell expects to generate cost synergies of at least $150 million to $175 million within 18 months after completion of the Merger.

Marvell’s ability to achieve such estimated cost synergies in the timeframe described, or at all, is subject to various assumptions by Marvell’s management, which may or may not prove to be accurate, as well as the incurrence of costs in Marvell’s operations that offset all or a portion of such cost synergies. As a consequence, Marvell may not be able to realize all of these cost synergies within the timeframe expected or at all. In addition, Marvell may incur additional or unexpected costs in order to realize these cost synergies. Failure to achieve the expected cost synergies could significantly reduce the expected benefits associated with the Merger.

In addition, Marvell has incurred and will incur substantial expenses in connection with completion of the Merger, including the costs and expenses of preparing and filing the Form S-4 Registration Statement that contains this joint proxy statement/prospectus with the SEC.

Marvell expects to continue to incur non-recurring costs associated with consummating the Merger, combining the operations of the two companies and achieving the desired cost synergies. These fees and costs have been, and will continue to be, substantial. The substantial majority of non-recurring expenses will consist of transaction costs related to the Merger and include, among others, fees paid to financial, legal and accounting advisors, employee benefit costs and filing fees.

The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results of Marvell following the completion of the Merger and many of these costs will be borne by Marvell even if the Merger is not completed.

 

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The business and operating results of Marvell could be harmed by the highly cyclical nature of the semiconductor industry.

Marvell and Cavium operate in the semiconductor industry. Historically, the semiconductor industry has been highly cyclical with recurring periods of diminished product demand. Significant downturns in the semiconductor industry are often experienced in connection with, or in anticipation of, excess manufacturing capacity worldwide, maturing product cycles and declines in general economic conditions. Even if demand for the products and solutions of Marvell and Cavium remains constant after the completion of the Merger, oversupply in the semiconductor industry may create competitive pressures that can degrade pricing levels and reduce revenues of the combined company. Any failure to expand in cycle upturns to meet customer demand and delivery requirements or contract in cycle downturns at a pace consistent with cycles in the industry could have an adverse effect on the business of the combined company.

Marvell shareholders and Cavium shareholders will have a reduced ownership and voting interest after completion of the Merger and will exercise less influence over management.

Marvell shareholders currently have the right to vote on the election of the board of directors of Marvell and on other matters affecting Marvell. Similarly, Cavium shareholders currently have the right to vote on the election of the board of directors of Cavium and on other matters affecting Cavium. Immediately following the Merger, Marvell shareholders will own approximately 76.7% of Marvell common shares, and Cavium’s shareholders will own approximately 23.3% of Marvell common shares, based on the number of Marvell common shares issued and shares of Cavium common stock outstanding as of January 22, 2018. As a result, current Marvell shareholders and current Cavium shareholders will have less influence on the management and policies of the combined company than they now have on the management and policies of Marvell and Cavium, respectively.

Uncertainties associated with the Merger may cause a loss of employees and may otherwise materially adversely affect the future business and operations of the combined company.

The combined company’s success after the Merger will depend in part upon the ability of the combined company to retain executive officers and key employees of Marvell and Cavium. In some of the fields in which Marvell and Cavium operate, there are only a limited number of people in the job market who possess the requisite skills and it may be increasingly difficult for the combined company to hire qualified personnel over time. The combined company will operate in several geographic locations where the labor markets, especially for engineers, are particularly competitive. Each of Marvell and Cavium has experienced difficulty in hiring and retaining sufficient numbers of qualified management, technical, application engineering, marketing, sales and support personnel in parts of their respective businesses.

Current and prospective employees of Marvell and Cavium may experience uncertainty about their roles with the combined company following the Merger. In addition, key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the Merger. The loss of services of any key personnel or the inability to hire new personnel with the requisite skills could restrict the ability of the combined company to develop new products or enhance existing products in a timely manner, to sell products to customers or to manage the business of the combined company effectively. Also, the business, financial condition and results of operations of the combined company could be materially adversely affected by the loss of any of its key employees, by the failure of any key employee to perform in his or her current position, or by the combined company’s inability to attract and retain skilled employees, particularly engineers.

Third parties may claim that the combined company is infringing their intellectual property, and the combined company could suffer significant litigation or licensing expenses or be prevented from selling its products or services.

The semiconductor industry is characterized by uncertain and conflicting intellectual property claims and vigorous protection and pursuit of these rights. Each of Marvell and Cavium is frequently involved in disputes

 

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regarding patent and other intellectual property rights. Each of Marvell and Cavium has in the past received, and the combined company may in the future receive, communications from third parties asserting that certain of its products, processes or technologies infringe upon their patent rights, copyrights, trademark rights or other intellectual property rights. The combined company may also receive claims of potential infringement. Defending these claims may be costly and time consuming, and may divert the attention of management and key personnel from other business issues. The complexity of the technology involved and the uncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement also might require the combined company to enter into costly royalty or license agreements. The combined company may be unable to obtain royalty or license agreements on acceptable terms, or at all. Similarly, changing its products or processes to avoid infringing the rights of others may be costly or impractical. The combined company may also be subject to significant damages or injunctions against development and sale of certain of its products and services. Resolution of such disputes could have a material adverse effect on the combined company’s results of operations or financial condition and may require material changes in production processes and products.

The combined company may not be able to adequately protect or enforce its intellectual property rights, which could harm its competitive position.

The combined company’s success and future revenue growth will depend, in part, on its ability to protect its intellectual property. The combined company will primarily rely on patent, copyright, trademark and trade secret laws, as well as non-disclosure agreements and other methods, to protect its proprietary technologies and processes. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose, illegally or otherwise, the combined company’s proprietary technologies and processes, despite efforts by the combined company to protect its proprietary technologies and processes. While the combined company will hold a significant number of patents, there can be no assurances that any additional patents will be issued. Even if new patents are issued, the claims allowed may not be sufficiently broad to protect the combined company’s technology. In addition, any of Marvell’s or Cavium’s existing patents, and any future patents issued to the combined company, may be challenged, invalidated or circumvented, either in connection with the Merger or otherwise. As such, any rights granted under these patents may not provide the combined company with meaningful protection. Marvell and Cavium may not have, and in the future the combined company may not have, foreign patents or pending applications corresponding to its U.S. patents and applications. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. If the combined company’s patents do not adequately protect its technology, competitors may be able to offer products similar to the combined company’s products. The combined company’s competitors may also be able to develop similar technology independently or design around its patents.

The Merger could have an adverse effect on the Marvell and Cavium brands.

The success of Marvell and Cavium is largely dependent upon the ability of Marvell and Cavium to maintain and enhance the value of their respective brands, their customers’ connection to and perception of the brands, and a positive relationship with customers and suppliers. Brand value, and as a result the businesses and results of operations of Marvell and Cavium, could be severely damaged if the Merger receives considerable negative publicity or if customers or suppliers otherwise come to have a diminished view of the brands as a result of the Merger or the common ownership of the existing businesses.

The use of cash and incurrence of substantial indebtedness in connection with the financing of the Merger may have an adverse impact on Marvell’s liquidity, limit Marvell’s flexibility in responding to other business opportunities and increase Marvell’s vulnerability to adverse economic and industry conditions.

The Merger will be financed in part by the use of Marvell’s cash on hand, Cavium’s cash on hand and the incurrence of a significant amount of indebtedness. As of December 23, 2017, Marvell had approximately $808.8 million of cash and cash equivalents and approximately $965.7 million of short-term investments. As of December 31, 2017, Cavium had approximately $140.5 million of cash and cash equivalents. In connection with

 

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the Merger, Marvell expects to obtain debt financing totaling $1.75 billion. The proceeds from the debt financing are expected to be used to pay, in part, the cash portion of the Merger Consideration, to refinance certain existing indebtedness of Cavium and to pay related fees and expenses. The use of cash on hand and indebtedness to finance the acquisition will reduce Marvell’s liquidity and could cause Marvell to place more reliance on cash generated from operations to pay principal and interest on Marvell’s debt, thereby reducing the availability of Marvell’s cash flow for working capital, dividend and capital expenditure needs or to pursue other potential strategic plans. Marvell expects that the agreements it will enter into with respect to the indebtedness it will incur to finance the Merger will contain restrictive covenants, including financial covenants requiring Marvell to maintain specified financial ratios and limitations on Marvell’s ability to incur additional liens and indebtedness or to pay dividends and make certain investments. Marvell’s ability to comply with these restrictive covenants can be affected by events beyond its control. The indebtedness and these restrictive covenants will also have the effect, among other things, of limiting Marvell’s ability to obtain additional financing, if needed, limiting its flexibility in the conduct of its business and making Marvell more vulnerable to economic downturns and adverse competitive and industry conditions. In addition, a breach of the restrictive covenants could result in an event of default with respect to the indebtedness, which, if not cured or waived, could result in the indebtedness becoming immediately due and payable and could have a material adverse effect on Marvell’s business, financial condition or operating results.

Because of higher debt levels, Marvell may not be able to service its debt obligations in accordance with their terms after the completion of the Merger.

Marvell’s ability to meet its expense and debt service obligations contained in the agreements Marvell expects to enter into with respect to the indebtedness Marvell will incur to finance the Merger will depend on Marvell’s available cash and its future performance, which will be affected by financial, business, economic and other factors, including potential changes in laws or regulations, industry conditions, industry supply and demand balance, customer preferences, the success of Marvell’s products and pressure from competitors. If Marvell is unable to meet its debt service obligations after the Merger or should Marvell fail to comply with its financial and other restrictive covenants contained in the agreements governing its indebtedness, Marvell may be required to refinance all or part of its debt, sell important strategic assets at unfavorable prices, incur additional indebtedness or issue common shares or other equity securities. Marvell may not be able to, at any given time, refinance its debt, sell assets, incur additional indebtedness or issue equity securities on terms acceptable to Marvell, in amounts sufficient to meet Marvell’s needs. If Marvell is able to raise additional funds through the issuance of equity securities, such issuance would also result in dilution to Marvell’s shareholders. Marvell’s inability to service its debt obligations or refinance its debt could have a material adverse effect on its business, financial condition or operating results after the Merger. In addition, Marvell’s debt obligations may limit its ability to make required investments in capacity, technology or other areas of its business, which could have a material adverse effect on its business, financial condition or operating results.

The Merger may result in significant charges or other liabilities, including taxes, that could adversely affect the financial results of the combined company.

The financial results of the combined company may be adversely affected by cash expenses and non-cash accounting charges incurred in connection with Marvell’s integration of the business and operations of Cavium. The amount and timing of these possible charges are not yet known. Further, Marvell’s failure to identify or accurately assess the magnitude of certain liabilities that Marvell is assuming in the Merger could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other adverse effects on Marvell’s business, operating results or financial condition. The price of Marvell common shares following the Merger could decline to the extent the combined company’s financial results are materially affected by any of these events.

 

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Marvell’s actual financial position and results of operations may differ materially from the unaudited pro forma financial data included herein.

The unaudited pro forma financial data included herein are presented for illustrative purposes only and are not necessarily indicative of what Marvell’s actual financial position or results of operations would have been had the Merger been completed on the dates indicated. These data reflect adjustments, which are based upon preliminary estimates, to allocate the purchase price to Cavium’s net assets. The purchase price allocation reflected in this joint proxy statement/prospectus is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Cavium as of the closing date of the Merger. In addition, subsequent to the closing date of the Merger, there may be further refinements of the purchase price allocation as additional information becomes available.

Accordingly, the final purchase accounting adjustments might differ materially from the pro forma adjustments reflected herein. See “Selected Unaudited Pro Forma Condensed Combined Financial Information” for more information.

The unaudited prospective financial information of Marvell and Cavium included in this joint proxy statement/prospectus involves risks, uncertainties and assumptions, many of which are beyond the control of Marvell and Cavium. As a result, it may not prove to be accurate and is not necessarily indicative of current values or future performance.

The unaudited prospective financial information of Marvell and Cavium referred to in “The Merger—Opinion of Marvell’s Financial Advisor, Goldman Sachs,” “The Merger—Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan—Opinion of Qatalyst Partners,” “The Merger—Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan—Opinion of J.P. Morgan” and contained in “The Merger—Unaudited Prospective Financial Information,” involves risks, uncertainties and assumptions and is not a guarantee of future performance. While the unaudited prospective financial information utilized by Marvell, Cavium and their respective advisors in connection with the Merger and summarized in this joint proxy statement/statement were prepared in good faith based on information available at the time of preparation, no assurances can be made regarding future events or that the assumptions made in preparing such unaudited prospective financial information will accurately reflect future conditions. In preparing such unaudited prospective financial information, the management of Marvell and Cavium each made assumptions regarding, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant uncertainties and contingencies, including, among others, risks and uncertainties described or incorporated by reference in this section and the section entitled “Cautionary Note Concerning Forward-Looking Statements,” all of which are difficult to predict and many of which are beyond the control of Marvell and Cavium and, if the Merger is completed, will be beyond the control of the combined company. Thus, the future financial results of Marvell and Cavium and, if the Merger is completed, the combined company, may materially differ from those expressed in the unaudited prospective financial information due to factors that are beyond Marvell’s and Cavium’s ability to control or predict. There can be no assurance that Marvell’s or Cavium’s unaudited prospective financial information will be realized or that Marvell’s or Cavium’s future financial results will not materially vary from the applicable unaudited prospective financial information. As a result, the unaudited prospective financial information cannot be considered predictive of actual future operating results, and this information should not be relied on as such. The unaudited prospective financial information covers multiple years, and the information by its nature becomes subject to greater uncertainty with each successive year. The unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared.

More specifically, the unaudited prospective financial information:

 

    necessarily makes numerous assumptions, many of which are difficult to predict and beyond the control of Marvell or Cavium and may not prove to be accurate;

 

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    does not necessarily reflect revised prospects for Marvell’s or Cavium’s respective businesses, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the unaudited prospective financial information was prepared;

 

    does not reflect the impact of any changes to U.S. tax laws currently proposed by Congress;

 

    is not necessarily indicative of current values or future performance, which may be significantly more favorable or less favorable than is reflected in the unaudited prospective financial information; and

 

    should not be regarded as a representation that the unaudited prospective financial information will be achieved.

The unaudited prospective financial information was not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or U.S. generally accepted accounting principles (“GAAP”) and does not reflect the effect of any proposed or other changes in GAAP that may be made in the future.

Risk Factors Relating to Marvell Common Shares

Cavium shareholders will become shareholders of Marvell upon receipt of Marvell common shares, which will change certain shareholder rights and privileges they hold as shareholders of Cavium.

Cavium shareholders will receive Marvell common shares as part of the Merger Consideration. There are a number of differences between the rights of a shareholder of Cavium and the rights of a shareholder of Marvell. We urge Cavium shareholders to review the discussion “Comparison of Rights of Shareholders” beginning on page 187.

The market for Marvell common shares may be adversely affected by the issuance of shares in the Merger.

In connection with the Merger, Marvell will issue an estimated 150.46 million Marvell common shares to Cavium shareholders, based on the number of shares of Cavium common stock outstanding on January 22, 2018, and will assume certain outstanding Cavium equity awards pursuant to the terms of the Merger Agreement. The increase in the number of issued Marvell common shares may lead to sales of such shares or the perception that such sales may occur, either of which may adversely affect the market for, and the market price of, Marvell common shares.

Other Risks

Additional Risks Relating to Marvell and Cavium.

Marvell and Cavium are, and following completion of the Merger Marvell will continue to be, subject to the risks described in (a) Part I, Item 1A in Marvell’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017, and its Quarterly Reports on Form 10-Q for the quarterly periods ended April 29, 2017, July 29, 2017 and October 28, 2017, and (b) Part I, Item 1A in Cavium’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. See the section entitled “Documents Incorporated by Reference” beginning on page 238 for more information.

Marvell is incorporated in Bermuda, and, as a result, it may not be possible for Marvell shareholders to enforce civil liability provisions of the securities laws of the United States. In addition, Marvell’s Bye-laws contain a waiver of claims or rights of action by Marvell’s shareholders against Marvell officers and directors, which will severely limit Marvell’s shareholders’ right to assert a claim against Marvell’s officers and directors under Bermuda law.

Marvell is organized under the laws of Bermuda. As a result, it may not be possible for Marvell shareholders to effect service of process within the United States upon Marvell, or to enforce against Marvell in U.S. courts’

 

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judgments based on the civil liability provisions of the securities laws of the United States. There is significant doubt as to whether the courts of Bermuda would recognize or enforce judgments of U.S. courts obtained against Marvell or Marvell’s directors or officers based on the civil liability provisions of the securities laws of the United States or any state, or hear actions brought in Bermuda against Marvell or those persons based on those laws. The United States and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not be automatically enforceable in Bermuda.

Marvell’s Bye-laws contain a broad waiver by Marvell’s shareholders of any claim or right of action, both individually and on Marvell’s behalf, against any of Marvell’s officers and directors. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take any action, in the performance of his or her duties with or for Marvell, other than with respect to any matter involving any fraud or dishonesty on the part of the officer or director or to any matter arising under U.S. federal securities laws. This waiver will limit the rights of Marvell’s shareholders to assert claims against Marvell’s officers and directors unless the act complained of involves fraud or dishonesty or arises as a result of a breach of U.S. federal securities laws. Therefore, so long as acts of business judgment do not involve fraud or dishonesty or arise as a result of a breach of U.S. federal securities laws, they will not be subject to shareholder claims under Bermuda law. For example, shareholders will not have claims against officers and directors for negligence, malfeasance or a breach of trust, unless the breach rises to the level of fraud or dishonesty, or arises as a result of a breach of U.S. federal securities laws.

In order to facilitate the satisfaction of any of the closing conditions relating to regulatory matters, Marvell could decide to commit to change its place of domicile from Bermuda to Delaware or restructure to become a wholly owned subsidiary of a new corporation incorporated in Delaware. Any such transaction would change the rights of the shareholders of Marvell, including former Cavium shareholders.

Marvell is organized under the laws of Bermuda. Several regulatory approvals are conditions to completion of the Merger. The decision of regulators whether, when or under what circumstances to approve the Merger may be affected by whether Marvell is a Bermuda corporation or a U.S. corporation. In order to facilitate the satisfaction of any of the conditions to the completion of the Merger relating to regulatory matters, Marvell could decide to (but is not obligated to) commit to change its place of domicile or organization from Bermuda to Delaware (a “Domestication”) or restructure to become a wholly owned subsidiary of a new corporation incorporated in Delaware (a “Holding Company Restructuring”).

Marvell cannot predict whether or not it will be necessary to commit to any such actions in order to satisfy any of the conditions to the completion of the Merger relating to regulatory matters, or whether Marvell would commit to do so even if necessary to obtain regulatory approval. If Marvell were to commit to a Domestication, that transaction would not be implemented until after the completion of the Merger. If Marvell were to commit to a Holding Company Restructuring, it could delay the completion of the Merger.

If Marvell elects to implement a Domestication, Marvell would not need to obtain shareholder approval of that transaction, and Marvell shareholders would not have statutory rights of appraisal or any other appraisal rights under either Bermuda or Delaware law. If Marvell elects to implement a Holding Company Restructuring, Marvell would need to obtain shareholder approval of the transaction, and Marvell shareholders would have statutory rights of appraisal under Bermuda law.

If Marvell implements either a Domestication or a Holding Company Restructuring, Marvell shareholders (including former Cavium shareholders) would hold shares in a Delaware corporation. There would be a number of differences between the rights of shareholders of Marvell under Bermuda law and the rights of shareholders under Delaware law. See the section entitled “Possible Domestication or Holding Company Restructuring of Marvell” for more information on these differences.

 

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If Marvell elects to implement a Domestication or a Holding Company Restructuring, there may be adverse U.S. federal income tax consequences to Marvell and shareholders of Marvell, including former Cavium shareholders.

Marvell is a Bermuda parent holding company with various foreign and U.S. subsidiaries. The applicable corporate income tax rate in the jurisdictions in which Marvell operates varies. Marvell’s current effective corporate income tax rate is based upon the application of currently applicable income tax laws, regulations and treaties in the many jurisdictions in which it operates. If Marvell elects to implement a Domestication or a Holding Company Restructuring, Marvell (in the case of a Domestication) or the new Delaware parent corporation (in the case of a Holding Company Restructuring) (“Delaware HoldCo”) will be subject to U.S. taxation on its income and capital gains. Also, Marvell or Delaware HoldCo, as applicable, will be subject to U.S. taxation on certain income of its non-U.S. subsidiaries (which would include Marvell, a Bermuda company, if it becomes a subsidiary of Delaware HoldCo). Either a Domestication or a Holding Company Restructuring would increase the potential for U.S. taxes on Marvell’s income by placing its foreign subsidiaries under a U.S. corporation. As a result of a Domestication or a Holding Company Restructuring, Marvell’s effective corporate tax rate may increase significantly, which could adversely impact Marvell’s financial results, including earnings and cash flow, for taxable periods after the completion of a Domestication or a Holding Company Restructuring. Marvell is unable to predict the impact of a Domestication or a Holding Company Restructuring on its effective tax rate going forward, and such changes could be significant.

Tax consequences differ between a Domestication and a Holding Company Restructuring. If Marvell elects to implement a Domestication, a U.S. holder (as defined below in the section entitled “Material United States Federal Income Tax Consequences”) who owns Marvell common shares with a fair market value of $50,000 or more, but less than 10% of Marvell’s issued common shares (measured by either value or total combined voting power and taking into account attribution rules), on the day of such Domestication generally would be required to recognize gain (but not loss) with respect to such Marvell common shares as a result of such Domestication, even if the U.S. holder continued to hold the shares and notwithstanding that the U.S. holder would not receive any cash or liquidity as a result of such Domestication. As an alternative to recognizing gain, such U.S. holder may elect to include in income the “all earnings and profits amount” attributable to such shares as that term is defined in Treasury Regulation Section 1.367(b)-2(d). Marvell expects that it will have a material amount of earnings and profits at the effective time of a Domestication, and thus a U.S. holder’s election to include in income the “all earnings and profits amount” may not be advantageous, depending on the U.S. holder’s tax basis and holding period for Marvell common shares. Any U.S. holder who owns 10% or more of Marvell’s issued common shares on the day of such Domestication generally would be required to pay taxes on a deemed dividend equal to the “all earnings and profits amount” attributable to those shares. Any U.S. holder who owns Marvell common shares with a fair market value of less than $50,000 on the day of such Domestication generally would not recognize any gain or loss and would not be required to include any part of the “all earnings and profits amount” in income.

If, instead of implementing a Domestication, Marvell implements a Holding Company Restructuring, Marvell expects that U.S. holders of Marvell common shares generally would not recognize gain or loss upon the exchange of their Marvell common shares for Delaware HoldCo shares.

Individual Marvell shareholders may be subject to tax consequences in addition to, or that vary from, the potential tax consequences discussed in this risk factor. Shareholders who fail to consult their own tax advisors could therefore be subject to unforeseen tax consequences as a result of a potential Domestication or Holding Company Restructuring.

 

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FINANCIAL SUMMARY

Comparative Market Price Data for Marvell and Cavium

Marvell common shares and shares of Cavium common stock are traded on NASDAQ under the symbols “MRVL” and “CAVM,” respectively. The following table presents trading information for Marvell common shares and Cavium common stock on November 2, 2017, the last trading day prior to the first media report stating that Marvell and Cavium were in advanced discussions regarding a potential transaction, November 17, 2017, the last trading day prior to the public announcement of the Merger, and January 22, 2018, the last practicable trading day prior to the filing of this joint proxy statement/prospectus with the SEC. On February 2, 2018, the Marvell record date, there were 495,909,755 Marvell common shares issued. On February 2, 2018, the Cavium record date, there were 69,731,912 shares of Cavium common stock issued and outstanding.

 

Date

   Marvell
Closing Price
     Cavium
Closing Price
     Estimated
Implied Value
Per Share (1)
 

November 2, 2017

   $ 18.28      $ 66.01      $ 79.77  

November 17, 2017

   $ 20.29      $ 75.83      $ 84.14  

January 22, 2018(2)

   $ 23.62      $ 89.85      $ 91.39  

 

(1) The implied value per share, as of each date, is equal to (i) $40.00, the cash portion of the Merger Consideration, plus (ii) 2.1757, the exchange ratio for the Merger, multiplied by the closing price of one Marvell common share on such date.
(2) January 22, 2018 is the last practicable full trading day prior to the filing with the SEC of this joint proxy statement/prospectus.

The following table shows the high and low sales prices of Marvell common shares and Cavium common stock as reported by NASDAQ for the indicated calendar quarters. For current price information, you are urged to consult publicly available sources.

 

For the calendar quarter ended:

   Cavium
Common Stock
     Marvell
Common Shares
 
   High      Low      High      Low  

2018

           

March 31 (through January 22, 2018)

   $ 90.83      $ 84.10      $ 24.21      $ 21.41  

2017

           

December 31

   $ 88.96      $ 65.02      $ 24.22      $ 17.85  

September 30

   $ 70.08      $ 56.96      $ 18.67      $ 14.87  

June 30

   $ 76.26      $ 60.10      $ 18.18      $ 14.58  

March 31

   $ 73.01      $ 60.52      $ 16.72      $ 13.83  

2016

           

December 31

   $ 66.14      $ 50.81      $ 15.00      $ 12.30  

September 30

   $ 58.51      $ 35.97      $ 13.56      $ 9.13  

June 30

   $ 64.04      $ 35.90      $ 11.00      $ 9.05  

March 31

   $ 64.92      $ 45.59      $ 10.52      $ 7.40  

2015

           

December 31

   $ 73.95      $ 59.45      $ 9.74      $ 7.55  

September 30

   $ 74.24      $ 57.26      $ 13.49      $ 8.21  

June 30

   $ 77.42      $ 62.32      $ 15.47      $ 13.05  

March 31

   $ 74.26      $ 55.55      $ 16.78      $ 13.84  

2014

           

December 31

   $ 63.99      $ 38.73      $ 15.28      $ 11.65  

September 30

   $ 56.60      $ 43.80      $ 14.74      $ 12.73  

June 30

   $ 53.32      $ 40.13      $ 16.65      $ 14.12  

March 31

   $ 47.47      $ 32.35      $ 16.62      $ 14.04  

 

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Marvell Dividends

On May 17, 2012, Marvell announced that Marvell’s board of directors had authorized the adoption of a quarterly cash dividend policy. Under the cash dividend policy, holders of Marvell common shares receive dividends when and as declared by Marvell’s board of directors. In fiscal year 2017, Marvell declared aggregate cash dividends of $0.24 per common share of Marvell, totaling $122.3 million. Marvell may modify, suspend or cancel its cash dividend policy at any time.

The following table provides information about the quarterly dividends declared by Marvell’s board of directors in the last four fiscal years.

 

Fiscal Period in which declared:

   Payment Date:      $ Per Share  

Fiscal Year 2018

     

Record Date: December 27, 2017

     January 16, 2018      $ 0.06  

Record Date: October 10, 2017

     October 26, 2017      $ 0.06  

Record Date: July 5, 2017

     July 21, 2017      $ 0.06  

Record Date: April 4, 2017

     April 20, 2017      $ 0.06  

Fiscal Year 2017

     

Record Date: December 6, 2016

     December 28, 2016      $ 0.06  

Record Date: September 28, 2016

     October 19, 2016      $ 0.06  

Record Date: June 14, 2016

     July 12, 2016      $ 0.06  

Record Date: March 29, 2016

     April 22, 2016      $ 0.06  

Fiscal Year 2016

     

Record Date: December 16, 2015

     December 29, 2015      $ 0.06  

Record Date: October 8, 2015

     October 22, 2015      $ 0.06  

Record Date: June 11, 2015

     July 1, 2015      $ 0.06  

Record Date: March 12, 2015

     April 2, 2015      $ 0.06  

Fiscal Year 2015

     

Record Date: December 11, 2014

     December 29, 2014      $ 0.06  

Record Date: September 11, 2014

     October 2, 2014      $ 0.06  

Record Date: June 12, 2014

     July 2, 2014      $ 0.06  

Record Date: March 13, 2014

     March 27, 2014      $ 0.06  

Cavium Dividends

Cavium has not paid any cash dividends with respect to Cavium common stock.

Selected Historical Consolidated Financial Data of Marvell

The following table presents selected historical consolidated financial data of Marvell, (i) as of and for each of the fiscal years within the five year period ending January 28, 2017, (ii) for the nine months ended October 28, 2017 and October 29, 2016, and (iii) as of October 28, 2017.

The consolidated statement of operations data for the fiscal years ended January 28, 2017, January 30, 2016, and January 31, 2015 and the consolidated balance sheet data as of January 28, 2017 and January 30, 2016 have been derived from Marvell’s audited consolidated financial statements included in Marvell’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017 and incorporated by reference in this joint proxy statement/prospectus. The consolidated statement of operations data for the fiscal years ended February 1, 2014 and February 2, 2013 and the consolidated balance sheet data as of January 31, 2015, February 1, 2014 and February 2, 2013 have been derived from Marvell’s consolidated financial statements for such periods, which have not been incorporated into this joint proxy statement/prospectus by reference.

The consolidated statement of operations data for the nine months ended October 28, 2017 and October 29, 2016 and the condensed consolidated balance sheet data as of October 28, 2017 have been derived from Marvell’s

 

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unaudited condensed consolidated financial statements included in its Quarterly Report on Form 10-Q for the fiscal quarter ended October 28, 2017, which is incorporated by reference in this joint proxy statement/prospectus. You should read the following selected financial data together with Marvell’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Marvell’s historical consolidated financial statements, including the related notes, and the other information contained or incorporated by reference in this joint proxy statement/prospectus. See “Documents Incorporated by Reference” for more information.

The results of operations for the historical periods included in the following table are not necessarily indicative of the results to be expected for future periods.

 

    Nine Months Ended     Fiscal Year Ended  
    October 28,
2017
    October 29,
2016
    January 28,
2017 (1)
    January 30,
2016 (2)
    January 31,
2015
    February 1,
2014
    February 2,
2013
 
    (In thousands, except per share data)  

Statement of Operations Data:

         

Net Revenue

  $ 1,793,761     $ 1,734,630     $ 2,317,674      $   2,649,216     $ 3,637,206     $ 3,340,717     $ 3,155,165  

Cost of goods sold

    705,303       777,117       1,029,527       1,442,517       1,799,425       1,613,673       1,482,563  
Research and development     534,444       629,767       831,398       994,733       1,091,547       1,080,228       991,950  

Operating income (loss)

    375,684       129,368       99,994       (775,505     456,376       348,615       365,136  

Income (loss) from continuing operations, net of tax (3)

    384,379       138,347       43,994       (769,155     483,787       384,170       377,861  

Income (loss) from discontinued operations, net of tax

    87,689       (37,105     (22,843     (42,245     (48,441     (68,850     (71,276

Net Income (loss)

  $ 472,068     $ 101,242     $ 21,151     $ (811,400   $ 435,346     $ 315,320     $ 306,585  

Income (loss) from continuing operations per share

         

Basic

  $ 0.77     $ 0.27     $ 0.09      $ (1.51   $ 0.95     $ 0.77     $ 0.68  

Diluted

  $ 0.75     $ 0.27     $ 0.09      $ (1.51   $ 0.93     $ 0.76     $ 0.67  

Income (loss) from discontinued operations per share

         

Basic

  $ 0.17     $ (0.07   $ (0.05    $ (0.08   $ (0.10   $ (0.13   $ (0.13

Diluted

  $ 0.17     $ (0.07   $ (0.05    $ (0.08   $ (0.09   $ (0.13   $ (0.13

Net income (loss) per share

         

Basic

  $ 0.94     $ 0.20     $ 0.04      $ (1.59   $ 0.85     $ 0.64     $ 0.55  

Diluted

  $ 0.92     $ 0.20     $ 0.04      $ (1.59   $ 0.84     $ 0.63     $ 0.54  

Weighted Average Shares

         

Basic

    499,568       510,373       509,738        510,945       511,089       496,518       555,310  

Diluted

    510,935       516,476       517,513        510,945       520,760       504,413       563,123  

 

     As of Nine
Months Ended
     As of the Fiscal Year Ended  
     October 28,
2017
     January 28,
2017 (1)
     January 30,
2016 (2)
     January 31,
2015
     February 1,
2014
     February 2,
2013
 
     (In thousands, except per share data)  

Balance Sheet Data:

           

Cash, cash equivalents and short-term investments

   $ 1,732,075      $ 1,668,360      $ 2,282,749      $ 2,529,555      $ 1,969,405      $ 1,918,990  

Working capital

   $ 1,880,340      $ 1,783,914      $ 1,728,877      $ 2,746,904      $ 2,232,081      $ 2,025,739  

Total assets

   $ 4,682,204      $ 4,648,650      $ 5,442,127      $ 5,844,387      $ 5,451,010      $ 5,261,764  

Shareholders’ equity

   $ 4,060,949      $ 4,027,651      $ 4,140,123      $ 5,146,089      $ 4,675,910      $ 4,484,595  

Other Data:

                 

Cash Dividends declared per share

   $ 0.18      $ 0.24      $ 0.24      $ 0.24      $ 0.24      $ 0.18  

 

(1) Fiscal 2017 includes $105.2 million of restructuring and other related charges that include $52.6 million for impairment of certain equipment, technology licenses and to fully impair a nonrefundable deposit due to the non-utilization of the related contract. Fiscal 2017 also included $68.0 million of tax expense related to restructuring actions taken.
(2) Fiscal 2016 includes $751.4 million of charges for litigation matters recognized by Marvell including a $736.0 million charge related to the $750 million settlement reached with Carnegie Mellon University, as well as certain other pending litigation. In addition, fiscal 2016 included $63.5 million of restructuring and other related charges that include $8.0 million for impairment of certain equipment and technology licenses, and $8.0 million for the write down of inventory due to the restructuring of the mobile platform business, a charge for a cash payment authorized by Marvell’s board of directors of $15.4 million to Marvell’s former chief executive officer and $11.4 million of costs for the surety bonds related to the litigation with Carnegie Mellon University.

 

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(3) In May 2017, Marvell sold the assets of its LTE thin-modem business. The transaction closed on May 18, 2017. Based on the terms of the agreement, Marvell received sale consideration of $52.9 million. The operations of the LTE business were reflected as discontinued operations during the nine-months ended October 28, 2017 and October 29, 2016 as reported in the Form 10-Q for the period ended October 28, 2017 as filed with the SEC. The operations of the LTE business have not been retrospectively reflected as discontinued operations in the annual periods presented above as management concluded that the impact was not material to each of these periods. Income (loss) from continuing operations net of tax, includes a loss related to the discontinued LTE business of $30.8 million, $30.7 million, $33.0 million, $25.4 million and $44.7 million for the fiscal years ended 2017, 2016, 2015, 2014 and 2013 respectively.

Selected Historical Consolidated Financial Data of Cavium

The following table sets forth certain selected financial information for Cavium as of the end of and for the periods indicated. The selected consolidated statements of operations data for the years ended December 31, 2016, 2015 and 2014 and the selected consolidated balance sheet data as of December 31, 2016 and 2015 are derived from, and qualified by reference to, the audited consolidated financial statements included in Cavium’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which is incorporated by reference into this joint proxy statement/prospectus. The selected consolidated statements of operations data for the years ended December 31, 2013 and 2012 and the selected consolidated balance sheet data as of December 31, 2014, 2013 and 2012 are derived from Cavium’s audited consolidated financial statements, which are not incorporated by reference into this joint proxy statement/prospectus. The selected consolidated statements of operations for the nine months ended September 30, 2017 and 2016, and the selected consolidated balance sheet data as of September 30, 2017 are derived from, and qualified by reference to, Cavium’s unaudited condensed consolidated financial statements included in Cavium’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, which is incorporated by reference into this joint proxy statement/prospectus. You should read the summary selected financial data together with Cavium’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Cavium’s historical consolidated financial statements, including the related notes thereto and the other information contained or incorporated by reference in this joint proxy statement/prospectus. The historical results are not necessarily indicative of results to be expected in the future. See “Where to Obtain Additional Information” for more information.

 

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    Nine Months Ended     Year Ended  
    September 30,     December 31,  
    2017     2016     2016     2015     2014     2013     2012  
    (In thousands, except per share data)  

Consolidated Statements of Operations Data:

             

Net revenue

  $ 723,657     $ 377,163     $ 603,314     $ 412,744     $ 372,978     $ 303,993     $ 235,480  

Cost of revenue

    364,513       190,074       318,000       143,767       138,359       114,679       102,602  

Gross profit

    359,144       187,089       285,314       268,977       234,619       189,314       132,878  

Operating expenses:

             

Research and development

    279,331       170,785       257,816       203,778       171,690       134,596       109,943  

Sales, general and administrative

    124,372       120,711       161,051       78,926       70,404       64,088       71,794  

Goodwill impairment

    —         —         —         —         —         —         27,680  

Total operating expenses

    403,703       291,496       418,867       282,704       242,094       198,684       209,417  

Loss from operations

    (44,559     (104,407     (133,553     (13,727     (7,475     (9,370     (76,539

Other expense, net:

             

Interest expense

    (22,679     (4,661     (12,734     (1,241     (1,472     (1,502     (646

Change in estimated fair value of notes payable and other

    —         —         —         —         (14,888     —         —    

Other, net

    145       (83     75       (410     (347     (879     (157

Total other expense, net

    (22,534     (4,744     (12,659     (1,651     (16,707     (2,381     (803

Loss before income taxes

    (67,093     (109,151     (146,212     (15,378     (24,182     (11,751     (77,342

Provision for (benefit from) income taxes

    716       (83,542     997       1,682       1,633       1,937       36,321  

Net loss

    (67,809     (25,609     (147,209     (17,060     (25,815     (13,688     (113,663

Net loss attributable to non-controlling interest

    —         —         —         —         (10,520     (10,723     (1,031

Net loss attributable to the Company

  $ (67,809   $ (25,609   $ (147,209   $ (17,060   $ (15,295   $ (2,965   $ (112,632

Earnings per share attributable to the Company:

             

Net loss per common share, basic and diluted

  $ (0.99   $ (0.44   $ (2.42   $ (0.31   $ (0.29   $ (0.06   $ (2.26

Shares used in computing basic and diluted net loss per common share

    68,175       58,840       60,883       55,589       53,451       51,596       49,886  

 

     As of      As of  
     September 30,      December 31,  
     2017      2016      2015      2014      2013      2012  
     (in thousands)  

Consolidated Balance Sheet Data:

                 

Cash and cash equivalents

   $ 152,654      $ 221,439      $ 134,646      $ 131,718      $ 127,763      $ 76,784  

Working capital

     297,811        320,883        196,772        177,453        151,071        109,682  

Total assets

     1,563,680        1,650,531        433,993        408,860        367,985        331,504  

Capital lease and technology license obligations

     42,828        53,413        30,466        45,896        33,395        41,332  

Current and long-term debt

     597,040        679,279        —          —          13,512        5,012  

Other non-current liabilities

     42,260        37,160        6,379        5,767        4,275        4,391  

Common stock and additional paid-in capital

     1,157,455        1,079,110        543,312        489,035        443,641        398,184  

Total stockholders’ equity

     752,946        741,844        353,900        316,683        286,584        244,092  

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following table sets forth Marvell’s selected unaudited pro forma condensed combined financial information as of October 28, 2017 and for the year ended January 28, 2017 and the nine months ended October 28, 2017.

The selected unaudited pro forma condensed combined financial information is based upon the historical financial statements of Marvell, after giving effect to the Merger. The selected unaudited pro forma condensed combined financial information also gives effect to the transactions undertaken to finance the Merger. The selected unaudited pro forma condensed combined balance sheet data as of October 28, 2017 combines the historical balance sheet of Marvell, giving effect to the Merger, and the Financing Transactions (as defined in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”), as if they had been completed on October 28, 2017. The selected unaudited pro forma condensed combined statements of operations data for the twelve months ended January 28, 2017 and the nine months ended October 28, 2017, give effect to the Merger, the QLogic Acquisition (as defined in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”) and the Financing Transactions, as if they had occurred on January 31, 2016.

The Merger will be accounted for using the acquisition method of accounting. The pro forma adjustments reflect adjustments required under GAAP for business combinations and are based upon, among other things, preliminary estimates of fair market values of assets acquired and liabilities assumed and certain assumptions that we believe are reasonable. Revisions to the preliminary estimates of fair market value may have a significant impact on the pro forma amounts of total assets, total liabilities and total shareholders’ equity, depreciation and amortization expense, interest expense and income tax expense. The actual adjustments to Marvell’s consolidated financial statements upon the completion of the Merger will depend on a number of factors, including additional information available and Marvell’s net assets on the closing date of the Merger. Therefore, the actual adjustments will differ from the pro forma adjustments, and the differences may be material. The selected unaudited pro forma condensed combined statements of operations do not reflect any non-recurring charges or gains that Marvell may record in connection with the Merger. However, these estimated non-recurring items will be reflected in Marvell’s statement of operations for the period during which the Merger will take place.

The selected unaudited pro forma condensed combined financial information set forth below should be read in conjunction with the information included under the headings “The Merger Agreement,” “Unaudited Pro Forma Condensed Combined Financial Information,” “Selected Historical Consolidated Financial Data of Marvell” and “Selected Historical Consolidated Financial Data of Cavium,” as well as Marvell’s consolidated financial statements and related notes thereto, Cavium’s consolidated financial statements and related notes thereto, and QLogic’s consolidated financial statements and related notes thereto, each of which is incorporated by reference into this joint proxy statement/prospectus.

 

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Selected Unaudited Pro Forma Statements of Operations Data and Selected Pro Forma  Balance Sheet Data

 

     Pro Forma  
     Nine Months
Ended
October 28,
2017
     Twelve Months
Ended
January 28,
2017
 
    

(In thousands, except

per share data)

 

Condensed Combined Statements of Operations Data:

     

Net revenue

   $ 2,517,418      $ 3,199,172  

Cost of goods sold

     1,210,274        1,691,787  

Research and development

     865,575        1,294,210  

Operating income (loss) from continuing operations

     118,520        (410,696

Net income (loss) from continuing operations

   $ 91,156      $ (475,529

Net income (loss) per share from continuing operations:

     

Basic

   $ 0.14      $ (0.72 )  

Diluted

   $ 0.14      $ (0.72

Weighted average shares:

     

Basic

     651,695        661,865  

Diluted

     669,876        661,865  
     Pro Forma as of         
     October 28,
2017
        
    

(In thousands)

        

Condensed Combined Balance Sheet Data:

     

Cash and cash equivalents

   $ 119,575     

Working capital

     589,435     

Total assets

     10,430,175     

Total shareholders’ equity

   $ 7,578,500     

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA AND PER SHARE FINANCIAL INFORMATION

The following table reflects historical information about basic and diluted net income (loss) per share from continuing operations and cash dividends declared per share for the fiscal year ended January 28, 2017 and nine months ended October 28, 2017, in the case of Marvell, and for the fiscal year ended December 31, 2016 and nine months ended September 30, 2017, in the case of Cavium, and the book value per common share as of October 28, 2017 in the case of Marvell and as of September 30, 2017 in the case of Cavium, in each case, on a historical basis, and for Marvell and Cavium on an unaudited pro forma condensed combined basis after giving effect to the Merger and the Financing Transactions. The pro forma data of the combined company assumes the Merger was complete and were derived by combining the historical consolidated financial information of Marvell and Cavium, which also includes Cavium’s acquisition of QLogic in the period ended December 31, 2016, as described elsewhere in this joint proxy statement/prospectus. For a discussion of the assumptions and adjustments made in preparing the unaudited pro forma combined financial information presented in this document, see “Unaudited Pro Forma Condensed Combined Financial Information.

Cavium shareholders should read the information presented in the following table together with the historical statements of Marvell, Cavium and QLogic and the related notes, which are incorporated herein by reference, and the “Unaudited Pro Forma Condensed Combined Financial Information” appearing elsewhere in this joint proxy statement/prospectus. The pro forma data are unaudited and for illustrative purposes only. Cavium shareholders should not rely on this information as being indicative of the historical results that would have been achieved during the periods presented had the companies always been combined or the future results that the combined company will achieve after the completion of the Merger. This pro forma information is subject to risks and uncertainties, including those discussed in “Risk Factors.”

 

    Marvell
Historical
    Cavium
Historical
    Pro Forma
Combined

(1) (2) (3)
    Pro Forma
Equivalent
Cavium Share (4)
 

Net income (loss) per share from continuing operations for the fiscal year ended January 28, 2017 for Marvell and the fiscal year ended December 31, 2016 for Cavium:

       

Basic net income (loss) per share from continuing operations

  $ 0.09     $ (2.42   $ (0.72   $ (1.57

Diluted net income (loss) per share from continuing operations

  $ 0.09     $ (2.42   $ (0.72   $ (1.57

Cash dividends declared per share for the fiscal year ended January 28, 2017 for Marvell and for the fiscal year ended December 31, 2016 for Cavium:

  $ 0.24       —       $ 0.24     $ 0.52  

Net income (loss) per share from continuing operations for the nine months ended October 28, 2017 for Marvell and the nine months ended September 30, 2017 for Cavium:

       

Basic net income (loss) per share from continuing operations

  $ 0.77     $ (0.99   $ 0.14     $ 0.30  

Diluted net income (loss) per share from continuing operations

  $ 0.75     $ (0.99   $ 0.14     $ 0.30  

Cash dividends declared per share for the nine months ended October 28, 2017 for Marvell and the nine months ended September 30, 2017 for Cavium:

  $ 0.18       —       $ 0.18     $ 0.39  

Book value per common share as of October 28, 2017 for Marvell and September 30, 2017 for Cavium:

  $ 8.27     $ 10.94     $ 11.63     $ 25.30  

 

(1) Pro forma net income (loss) per share from continuing operations is based on pro forma combined net income and pro forma combined weighted average common shares outstanding at the end of the period.
(2) Pro forma cash dividends declared per share represents Marvell’s historical cash dividends declared per share.

 

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(3) Pro forma book value per common share is calculated based on pro forma combined equity and pro forma combined shares outstanding at the end of the period.
(4) The pro forma equivalent Cavium share amounts were calculated by multiplying the pro forma combined amounts by the Exchange Ratio of 2.1757. The Exchange Ratio does not include the $40 per share cash portion of the Merger Consideration.

 

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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus, including the information and other documents incorporated by reference into this joint proxy statement/prospectus, contains or incorporates by reference or may contain or may incorporate by reference “forward-looking statements” that have been made pursuant to the provisions of, and in reliance on the safe harbor under, the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the benefits of the Merger, the anticipated timing of the Merger and the products and markets of each company. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to future prospects, developments and business strategies. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are made based on expectations and beliefs concerning future events affecting Marvell and Cavium and are subject to uncertainties and factors relating to their respective operations and business environment, all of which are difficult to predict and many of which are beyond their control, that could cause their actual results to differ materially from those matters expressed in or implied by these forward-looking statements.

The forward-looking statements involve risks and uncertainties. The ability of either Marvell or Cavium to predict results or actual effects of its plans and strategies is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of each of Marvell and Cavium that are incorporated herein by reference, including the following:

 

    risks related to the fluctuation of the market price of Marvell common shares prior to completion of the Merger;

 

    the risk that factors other than those currently affecting the current market prices of Marvell common shares and Cavium common stock may affect the market price of Marvell common shares after the Merger;

 

    the risk that the Merger disrupts current plans and operations of Cavium or Marvell;

 

    the risk that the Merger may not be completed in a timely manner or at all;

 

    the failure to satisfy the conditions to the completion of the Merger, including the adoption of the Merger Agreement by the shareholders of Cavium, the approval of the Marvell Share Issuance by the shareholders of Marvell, and the receipt of required governmental and regulatory approvals;

 

    the risk that in order to facilitate the satisfaction of any of the conditions to the completion of the Merger relating to regulatory matters, Marvell may commit to change its place of domicile or organization from Bermuda to Delaware or become a wholly owned subsidiary of a new corporation incorporated in Delaware, either of which would alter shareholders’ rights and may have significant adverse tax consequences;

 

    risks that the business relationships of Marvell and Cavium may be subject to disruption due to uncertainty associated with the Merger;

 

    risks that Marvell will not be able to secure the funds necessary to pay the cash portion of the Merger Consideration and refinance certain of Marvell’s and Cavium’s existing indebtedness on acceptable terms, in a timely manner or at all;

 

    the effect or outcome of any legal proceedings that may be instituted in connection with the Merger Agreement or the Merger;

 

    risks related to Marvell’s ability to realize the benefits expected from the Merger, including its ability to realize anticipated cost synergies in the timeframe anticipated or at all;

 

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    the ability of Marvell to successfully integrate Cavium’s operations and product lines;

 

    the risk of downturns in the highly cyclical semiconductor industry;

 

    the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

 

    risks related to the retention of employees and protection of intellectual property of Marvell and Cavium; and

 

    risks related to Marvell’s incurrence of indebtedness in connection with the Merger.

Because these forward-looking statements are subject to assumptions and uncertainties, actual results might differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference in this joint proxy statement/prospectus.

All subsequent written and oral forward-looking statements concerning the Merger or other matters addressed in this joint proxy statement/prospectus and attributable to Marvell or Cavium or any person acting on their behalf are expressly qualified in their entirety by the cautionary notes contained or referred to in this section. Except to the extent required by applicable law or regulation, Marvell and Cavium undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement/prospectus or to reflect the occurrence of unanticipated events. Neither Marvell nor Cavium gives any assurance that either Marvell or Cavium will achieve its expectations.

 

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THE MARVELL GENERAL MEETING

Overview

This joint proxy statement/prospectus is being provided to Marvell shareholders as part of a solicitation of proxies by the Marvell board of directors for use at the general meeting of Marvell shareholders and at any adjournments or postponements thereof. This joint proxy statement/prospectus is first being furnished to shareholders of Marvell on or about February 7, 2018. In addition, this joint proxy statement/prospectus constitutes a prospectus for Marvell in connection with the Marvell Share Issuance.

Date, Time and Place of the Marvell General Meeting

The general meeting of Marvell shareholders will be held at the offices of Marvell Semiconductor, Inc. located at 5488 Marvell Lane, Santa Clara, California 95054, on March 16, 2018 at 1:00 p.m. local time, unless adjourned or postponed to a later date or time.

Purposes of the Marvell General Meeting

At the Marvell general meeting, Marvell shareholders will be asked to consider and vote on the following proposals:

 

    the proposal to approve the Marvell Share Issuance; and

 

    the Marvell Adjournment Proposal.

A copy of the Merger Agreement is attached to this joint proxy statement/prospectus as Annex A. Marvell shareholders are encouraged to read the Merger Agreement in its entirety.

THE MATTERS TO BE CONSIDERED AT THE MARVELL GENERAL MEETING ARE OF GREAT IMPORTANCE TO MARVELL SHAREHOLDERS. ACCORDINGLY, MARVELL SHAREHOLDERS ARE URGED TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS JOINT PROXY STATEMENT/PROSPECTUS, AND TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED, PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.

The Marvell board of directors unanimously recommends that Marvell shareholders vote “FOR” the approval of Marvell Share Issuance and “FOR” the Marvell Adjournment Proposal.

Record Date; Issued Shares; Shares Entitled to Vote

The record date for the Marvell general meeting is February 2, 2018. This means that you must be a shareholder of record of Marvell common shares at the close of business on February 2, 2018, in order to vote at the Marvell general meeting. You are entitled to one vote for each Marvell common share you own. At the close of business on the Marvell record date, there were 495,909,755 Marvell common shares issued and entitled to vote, held by approximately 418 holders of record.

Quorum and Vote Required

A quorum of Marvell shareholders is required to transact business at the Marvell general meeting. A quorum for the Marvell general meeting is the presence of holders representing in person or by proxy in excess of 50% of the total issued voting shares of Marvell throughout the Marvell general meeting. Abstentions and broker non-votes are counted for the purpose of determining the presence or absence of a quorum. Marvell’s transfer agent, American

 

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Stock Transfer and Trust Company, will act as inspector of elections at the Marvell general meeting and will ascertain whether a quorum is present, tabulate the votes and determine the voting results on all matters presented to the Marvell shareholders at the Marvell general meeting. If a quorum is not present, the Marvell general meeting will stand adjourned as may be determined by Marvell’s board of directors in accordance with its Bye-laws in order to permit the further solicitation of proxies or votes. At any subsequent reconvening of the Marvell general meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the Marvell general meeting, except for any proxies that have been effectively revoked or withdrawn prior to the reconvening of the Marvell general meeting.

For shares held in “street name,” your bank, broker or other nominee will not be permitted to vote at the Marvell general meeting without specific instructions as to how to vote from you as the beneficial owner of Marvell common shares. Broker non-votes will be entirely excluded from the vote and will have no effect on the vote on the Marvell Share Issuance or the Marvell Adjournment Proposal.

 

    Required vote to approve the Marvell Share Issuance. Approval of the Marvell Share Issuance requires the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting at which a quorum is present, which, under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, excludes abstentions and broker non-votes, if any, which will have no effect on the outcome of the vote on the Marvell Share Issuance. An abstention occurs when a Marvell shareholder attends the Marvell general meeting in person or is represented at the Marvell general meeting by proxy and abstains from voting. Shares not in attendance and not represented by proxy at the Marvell general meeting will have no effect on the vote on the Marvell Share Issuance, provided that a quorum is present.

 

    Required vote to approve the Marvell Adjournment Proposal. Approval of the Marvell Adjournment Proposal requires the affirmative vote of a majority of the Marvell common shares represented in person or by proxy at the Marvell general meeting regardless of whether a quorum is present. Under legal principles understood by Marvell’s Bermuda counsel to be applicable in Bermuda, abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on the Marvell Adjournment Proposal. Shares not in attendance and not represented by proxy at the Marvell general meeting will have no effect on the outcome of the vote on the Marvell Adjournment Proposal.

Share Ownership and Voting by Marvell’s Directors and Executive Officers

At the close of business on the record date for the Marvell general meeting, Marvell’s directors and executive officers had the right to vote approximately 34,168,030 Marvell common shares at the Marvell general meeting, collectively representing approximately 6.9% of Marvell common shares issued and entitled to vote on that date. We currently expect that Marvell’s directors and executive officers will vote their shares “FOR” the approval of the Marvell Share Issuance and “FOR” the Marvell Adjournment Proposal.

How to Vote

You may vote your Marvell common shares in person at the Marvell general meeting or by submitting a proxy (including proxies received by telephone or over the Internet). Marvell recommends that you submit your proxy even if you plan to attend the Marvell general meeting. If you submit your proxy, you may change your vote if you attend and vote at the Marvell general meeting. However, mere attendance at the Marvell general meeting will not automatically revoke your previously submitted proxy.

Owners of record (that is, shareholders of record who hold Marvell common shares in their own name, as opposed to through a bank, broker or other nominee), as of the close of business on the Marvell record date, may vote in person at the Marvell general meeting or by proxy. This means that you may use the enclosed proxy card(s) to instruct the persons named as proxies how to vote your shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your shares will be voted in accordance with your instructions. The named proxies will vote all shares at the Marvell general meeting for

 

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which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record have three ways to vote by proxy:

 

    Internet: You can submit your proxy over the Internet at the Internet address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy over the Internet, do not return your proxy card(s).

 

    Telephone: You can submit your proxy by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit your proxy by telephone, do not return your proxy card(s).

 

    Mail: You can submit your proxy by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

If you sign and return your proxy card(s) but do not mark your card(s) to instruct the proxies how to vote your shares on each proposal, your shares will be voted as recommended by the Marvell board of directors.

The deadline for voting electronically through the Internet or by telephone is 11:59 p.m. Eastern time on March 15, 2018.

Shares Held in “Street Name”

Marvell shareholders who hold Marvell common shares in a stock brokerage account or through a bank, broker or other nominee (“street name” shareholders) who wish to vote at the Marvell general meeting should be provided a voting instruction form by the institution that holds their shares. If this has not occurred, contact the institution that holds your shares.

A number of banks and brokerage firms participate in a program that also permits shareholders whose shares are held in “street name” to direct their vote by telephone or over the Internet. If your common shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate shareholders’ identities, to allow shareholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Generally, votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m. Eastern time on March 15, 2018. However, please follow the instructions included on the voting instruction form. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the Marvell general meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the Marvell general meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

With respect to the approval of the Marvell Share Issuance and the Marvell Adjournment Proposal, for shares held in “street name,” if you do not instruct your bank, broker or other nominee how to vote your shares, your bank, broker or other nominee will not be authorized to vote, and will not vote your shares. This will have no effect on the outcome of the vote on the approval of the Marvell Share Issuance or the Marvell Adjournment Proposal.

If you abstain from voting with respect to the approval of the Marvell Share Issuance or the Marvell Adjournment Proposal, your abstention will be entirely excluded from the vote and will have no effect on the outcome of the vote on the approval of the Marvell Share Issuance or the Marvell Adjournment Proposal.

If you do not vote your shares, either in person at the Marvell general meeting or by proxy, your failure to vote will have no effect on the outcome of the vote on the approval of the Marvell Share Issuance or the Marvell Adjournment Proposal.

 

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Revoking Your Proxy

If you are the owner of record as of the close of business on the Marvell record date, you may change or revoke your proxy at any time before it is voted at the Marvell general meeting by:

 

    sending a written notice to Marvell’s registered office at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, Attn: Assistant Secretary, bearing a date later than the date of the proxy that is received prior to the Marvell general meeting and stating that you revoke your proxy;

 

    signing, dating and delivering a new valid proxy card(s) bearing a later date that is received prior to the Marvell general meeting;

 

    submitting your voting instructions again by telephone or over the Internet by 11:59 p.m. Eastern time on March 15, 2018; or

 

    attending the Marvell general meeting and voting in person, although attendance at the Marvell general meeting will not, by itself, revoke a proxy.

If you are a “street name” shareholder and submitted voting instructions to your broker, bank or other nominee, please refer to the instructions provided by your broker, bank or other nominee on how to change your vote.

Tabulation of the Votes

Each Marvell common share held by a shareholder as of the Marvell record date will be entitled to one vote. All votes will be tabulated by American Stock Transfer and Trust Company, which will act as the inspector of elections at the Marvell general meeting. It will ascertain whether a quorum is present, tabulate the votes and determine the voting results on all matters presented to the Marvell shareholders at the Marvell general meeting. Voting at the meeting will be taken on a poll in accordance with Marvell’s Bye-laws.

Other Voting Matters

Voting in Person

If you plan to attend the Marvell general meeting and wish to vote in person, Marvell will give you a ballot at the general meeting. To help ensure your shares are voted, Marvell recommends that you submit your proxy or voting instruction form anyway. If you are a shareholder of record, please bring a form of personal identification to be admitted to the meeting. If your shares are held in the name of your broker, bank or other nominee and you plan to attend the meeting, you must present proof of your beneficial ownership of those shares as of the Marvell record date, such as a bank or brokerage account statement or letter, together with a form of personal identification, to be admitted to the Marvell general meeting.

However, if your shares are held in “street name,” you must first obtain from your bank, broker or other nominee a legal proxy authorizing you to vote the shares in person, which you must bring with you to the Marvell general meeting.

Electronic Access to Proxy Materials

This joint proxy statement/prospectus is available on Marvell’s Internet site at http://investor.marvell.com and http://marvellcavium.transactionannouncement.com.

Individuals with Disabilities

Marvell can provide you with reasonable assistance to help you to participate in the Marvell general meeting if you tell Marvell about your disability and how you plan to attend. Please write to 5488 Marvell Lane, Santa Clara, California 95054 Attention: Investor Relations, or call Marvell’s Investor Relations department at (408) 222-0777, at least two weeks before the Marvell general meeting.

 

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Proxy Solicitations

Marvell is soliciting proxies for the Marvell general meeting from Marvell shareholders. This proxy is being solicited on behalf of Marvell’s board of directors. Marvell will pay the cost of distributing this joint proxy statement/prospectus and related materials. In addition to this mailing, Marvell’s directors, officers and other staff members (who will not receive any additional compensation for their services) may solicit proxies personally, and by telephone, facsimile, courier service, mail, email, press release or advertisement (including on television, radio, newspapers or other publications of general distribution) or over the Internet. The extent to which this will be necessary depends upon how promptly proxies are returned. Marvell urges you to send in your proxy without delay. Innisfree M&A Incorporated has been engaged to aid in the distribution and solicitation of proxies. Marvell will pay Innisfree M&A Incorporated a fee of approximately $25,000 for these services, plus a reasonable amount to cover expenses. Marvell has agreed to indemnify Innisfree M&A Incorporated against certain liabilities arising out of or in connection with this engagement. Marvell and its proxy solicitors will also request that banks, brokerage houses and other custodians, nominees and fiduciaries send proxy materials to the beneficial owners of Marvell common shares and will, if requested, reimburse them for their reasonable out-of-pocket expenses in doing so.

Assistance

If you need assistance in completing your proxy card or you have questions regarding the Marvell general meeting, you should contact the following:

Marvell Technology Group Ltd.

Attention: Investor Relations

c/o Marvell Semiconductor, Inc.

5488 Marvell Lane

Santa Clara, California 95054

Phone: 408-222-0777

ir@marvell.com

or

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

 

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PROPOSAL 1

THE MARVELL SHARE ISSUANCE

As discussed in this joint proxy statement/prospectus, Marvell shareholders are being asked to consider and vote on the proposal to approve the Marvell Share Issuance in connection with the Merger pursuant to the terms of the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/ prospectus. The approval of this proposal by the shareholders of Marvell is a condition to the completion of the Merger.

You should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the proposed Marvell Share Issuance and the other transactions contemplated by the Merger Agreement, including the Merger.

AFTER CAREFUL CONSIDERATION, THE MARVELL BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER AND THE MARVELL SHARE ISSUANCE, AND HAS DETERMINED THAT THE MERGER AND THE MARVELL SHARE ISSUANCE ARE FAIR TO, AND IN THE BEST INTERESTS OF, MARVELL AND ITS SHAREHOLDERS. ACCORDINGLY, THE MARVELL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MARVELL SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE MARVELL SHARE ISSUANCE, AND YOUR PROPERLY SIGNED AND DATED PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.

 

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PROPOSAL 2

THE MARVELL ADJOURNMENT PROPOSAL

Marvell shareholders may be asked to vote on the Marvell Adjournment Proposal, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the Marvell general meeting to approve the Marvell Share Issuance.

The Marvell board of directors unanimously recommends that Marvell shareholders vote “FOR the Marvell Adjournment Proposal, and your properly signed and dated proxy will be so voted unless you specify otherwise.

Please note that pursuant to Section 41 of Marvell’s Bye-laws, the chairman of a general meeting may, with the consent of the shareholders at any general meeting at which a quorum is present (and shall if so directed by the shareholders), adjourn the meeting. In addition, the chairman may adjourn the meeting to another time and place without such consent or direction if it appears to him or her that:

 

  (a) it is likely to be impracticable to hold or continue that meeting because of the number of shareholders wishing to attend who are not present; or

 

  (b) the unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or

 

  (c) an adjournment is otherwise necessary so that the business of the meeting may be properly conducted.

Unless the meeting is adjourned to a specific date and time, new notice of the date, time and place for the resumption of the adjourned meeting shall be given to each shareholder in accordance with Marvell’s Bye-laws. If a quorum is not present at the Marvell general meeting within half an hour from the time appointed for the meeting, Section 40 of Marvell’s Bye-laws requires that the meeting be adjourned to the same day one week later, at the same time and place or to such other day, time or place as Marvell’s board of directors may determine.

The Merger Agreement provides that, subject to certain exceptions, Marvell must obtain Cavium’s consent before postponing or adjourning the Marvell general meeting. For more information, see “The Merger Agreement—Shareholder Meetings; Proxy Statement/Prospectus.

 

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THE CAVIUM SPECIAL MEETING

Overview

This joint proxy statement/prospectus is being provided to Cavium shareholders as part of a solicitation of proxies by the Cavium board of directors for use at the Cavium special meeting and at any adjournments or postponements thereof. This joint proxy statement/prospectus is first being furnished to shareholders of Cavium on or about February 7, 2018. In addition, this joint proxy statement/prospectus constitutes a prospectus for Marvell in connection with the issuance by Marvell of its common shares pursuant to the Merger Agreement.

Date, Time and Place of the Cavium Special Meeting

The Cavium special meeting will be held at Cavium’s headquarters, located at 2315 N. First Street, San Jose, California 95131, on March 16, 2018, at 10:00 a.m., local time, unless adjourned or postponed to a later date or time.

Purposes of the Cavium Special Meeting

At the Cavium special meeting, Cavium shareholders will be asked to consider and vote on the following proposals:

 

    the Merger Proposal;

 

    the Cavium Adjournment Proposal; and

 

    the Cavium Non-Binding Compensation Proposal.

A copy of the Merger Agreement is attached to this joint proxy statement/prospectus as Annex A. Cavium shareholders are encouraged to read the Merger Agreement in its entirety.

THE MATTERS TO BE CONSIDERED AT THE CAVIUM SPECIAL MEETING ARE OF GREAT IMPORTANCE TO CAVIUM SHAREHOLDERS. ACCORDINGLY, CAVIUM SHAREHOLDERS ARE URGED TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS JOINT PROXY STATEMENT/PROSPECTUS, AND TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED PRE-ADDRESSED POSTAGE-PAID ENVELOPE.

The Cavium board of directors unanimously recommends that you vote “FOR” the Merger Proposal; “FOR” the Cavium Adjournment Proposal; and “FOR” the Cavium Non-Binding Compensation Proposal.

Record Date; Outstanding Shares; Shares Entitled to Vote

The record date for the Cavium special meeting is February 2, 2018. This means that you must be a holder of record of Cavium common stock at the close of business on February 2, 2018, in order to vote at the Cavium special meeting. You are entitled to one vote for each share of Cavium common stock you own. At the close of business on the Cavium record date, there were 69,731,912 shares of Cavium common stock outstanding and entitled to vote, held by approximately 166 holders of record.

A complete list of Cavium shareholders entitled to vote at the Cavium special meeting will be available for inspection at the principal place of business of Cavium during regular business hours for a period of no less than ten days before the Cavium special meeting and at the place of the Cavium special meeting during the meeting.

Quorum and Vote Required

The presence in person or by proxy of a majority of the outstanding shares of Cavium common stock entitled to vote will constitute a quorum for the transaction of business at the Cavium special meeting.

 

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The votes required for each proposal are as follows:

 

    Required vote to approve the Merger Proposal. Approval of the Merger Proposal requires the affirmative vote of a majority of the outstanding shares of Cavium common stock entitled to vote at the Cavium special meeting. Accordingly, abstentions, broker non-votes and shares not represented at the Cavium special meeting will have the same effect as a vote “AGAINST” the Merger Proposal.

 

    Required vote to approve the Cavium Adjournment Proposal. Approval of the Cavium Adjournment Proposal requires an affirmative vote of a majority of the shares present in person, by remote communication, or represented by proxy and entitled to vote at the Cavium special meeting, regardless of whether a quorum is present. Accordingly, abstentions will have the same effect as a vote “AGAINST” the Cavium Adjournment Proposal, while broker non-votes and shares not represented at the Cavium special meeting will have no effect on the Cavium Adjournment Proposal.

 

    Required vote to approve the Cavium Non-Binding Compensation Proposal. Approval of the Cavium Non-Binding Compensation Proposal requires an affirmative vote of a majority of the shares present in person, by remote communication, or represented by proxy and entitled to vote, assuming a quorum is present. Accordingly, abstentions will have the same effect as a vote “AGAINST” the Cavium Non-Binding Compensation Proposal, while broker non-votes and shares not represented at the Cavium special meeting will have no effect on the Cavium Non-Binding Compensation Proposal, provided that a quorum is present. The Cavium Non-Binding Compensation Proposal is advisory, and therefore not binding on Cavium, Cavium’ compensation committee or the Cavium board of directors. Further, the arrangements are contractual in nature and not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the Cavium Non-Binding Compensation Proposal, if the Merger is completed, Cavium’s named executive officers may be or become entitled to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments.

Share Ownership and Voting by Cavium’s Directors and Executive Officers

At the close of business on the record date for the Cavium special meeting, Cavium’s directors and executive officers had the right to vote approximately 2,303,909 shares of the then-outstanding Cavium voting stock at the Cavium special meeting, collectively representing approximately 3.3% of the Cavium common stock outstanding and entitled to vote on that date. We currently expect that Cavium’s directors and executive officers will vote their shares “FOR the Merger Proposal, “FOR the Cavium Adjournment Proposal and “FOR the Cavium Non-Binding Compensation Proposal. Mr. Ali has entered into a voting agreement with Marvell to vote his 1,786,745 shares of Cavium common stock at the Cavium special meeting “FOR the Merger Proposal and “FOR the Cavium Adjournment Proposal.

How to Vote

You may vote your shares of Cavium common stock in person at the Cavium special meeting, by remote communication or by proxy. Cavium recommends that you submit your proxy even if you plan to attend the Cavium special meeting. If you submit your proxy, you may change your vote if you attend and vote at the Cavium special meeting; however, mere attendance at the Cavium special meeting will have no effect on your vote.

Owners of record (that is, shareholders of record who hold shares of Cavium common stock in their own name, as opposed to through a bank, broker or other nominee) as of the close of business on the Cavium record date, may vote in person at the Cavium special meeting, by remote communication or by proxy. This means that you may use the enclosed proxy card(s) to tell the persons named as proxies how to vote your shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your shares will be voted in accordance with your instructions. The named proxies will vote all shares at the

 

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Cavium special meeting for which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record have three ways to vote by proxy:

 

    Internet: You can submit a proxy over the Internet at the Internet address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit a proxy over the Internet, do not return your proxy card(s).

 

    Telephone: You can submit a proxy by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote. If you submit a proxy by telephone, do not return your proxy card(s).

 

    Mail: You can submit a proxy by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

If you sign and return your proxy card(s) but do not mark your card(s) to tell the proxies how to vote your shares on each proposal, your shares will be voted as recommended by the Cavium board of directors.

The deadline for voting electronically through the Internet or by telephone is 11:59 p.m., Eastern time on March 15, 2018.

Shares Held in “Street Name”

Cavium shareholders who hold shares of Cavium common stock in a stock brokerage account or through a bank, broker or other nominee (“street name” shareholders) who wish to vote at the Cavium special meeting should be provided a voting instruction form by the institution that holds their shares. If this has not occurred, contact the institution that holds your shares. A number of banks and brokerage firms participate in a program that also permits “street name” shareholders to direct their vote by telephone or over the Internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate shareholders’ identities, to allow shareholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m. Eastern time, on March 15, 2018. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the Cavium special meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the Cavium special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

With respect to the Merger Proposal, the Cavium Adjournment Proposal and the Cavium Non-Binding Compensation Proposal, for shares held in “street name,” if you do not instruct your bank, broker or other nominee how to vote your shares, your bank, broker or other nominee will not be authorized to vote, and a broker non-vote will occur. A broker non-vote will have the same effect as a vote “AGAINST the Merger Proposal, but will have no effect on the Cavium Adjournment Proposal and will have no effect on the Cavium Non-Binding Compensation Proposal (provided that a quorum is present).

If you abstain from voting with respect to the Merger Proposal, the Cavium Adjournment Proposal or the Cavium Non-Binding Compensation Proposal, your abstention will have the same effect as a vote “AGAINST” such proposal.

If you do not vote your shares, either in person at the Cavium special meeting or by proxy, your failure to vote will have the same effect as a vote “AGAINST” the Merger Proposal, but will have no effect on the Cavium

 

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Adjournment Proposal and will have no effect on the Cavium Non-Binding Compensation Proposal (provided that a quorum is present).

Revoking Your Proxy

If you are the owner of record as of the close of business on the Cavium record date, you may change or revoke your proxy at any time before it is voted at the Cavium special meeting by:

 

    sending a written notice to Cavium at 2315 N. First Street, San Jose, California 95131, Attention: Secretary, bearing a date later than the date of the proxy that is received prior to the Cavium special meeting and stating that you revoke your proxy;

 

    signing, dating and delivering a new valid proxy card(s) bearing a later date that is received prior to the Cavium special meeting;

 

    submitting your voting instructions again by telephone or over the Internet by 11:59 p.m. Eastern time on March 15, 2018; or

 

    attending the Cavium special meeting and voting in person, although attendance at the Cavium special meeting will not, by itself, revoke a proxy.

If you are a “street name” shareholder and submitted voting instructions to your broker, bank or other nominee, please refer to the instructions provided by your broker, bank or other nominee on how to change your vote.

Tabulation of the Votes

Each Cavium share held by a shareholder as of the Cavium record date will be entitled to one vote. All votes will be tabulated by the inspector of elections appointed for the Cavium special meeting, who will count the votes, determine the existence of a quorum, validity of proxies and ballots, and certify the results of the voting.

Other Voting Matters

Voting in Person

If you plan to attend the Cavium special meeting and wish to vote in person, Cavium will give you a ballot at the special meeting. To help ensure your shares are voted, Cavium recommends that you submit your proxy or voting instruction form anyway. If you are a shareholder of record, please bring a form of personal identification to be admitted to the meeting. If your shares are held in the name of your broker, bank or other nominee and you plan to attend the meeting, you must present proof of your beneficial ownership of those shares as of the Cavium record date, such as a bank or brokerage account statement or letter, together with a form of personal identification, to be admitted to the Cavium special meeting.

However, if your shares are held in “street name,” you must first obtain from your bank, broker or other nominee a legal proxy authorizing you to vote the shares in person, which you must bring with you to the Cavium special meeting.

Electronic Access to Proxy Materials

This joint proxy statement/prospectus is available on Cavium’s Internet site at http://investor.caviumnetworks.com and http://marvellcavium.transactionannouncement.com.

Individuals with Disabilities

Cavium can provide you with reasonable assistance to help you to participate in the Cavium special meeting if you tell Cavium about your disability and how you plan to attend. Please write to Cavium’s Investor Relations

 

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department, at Cavium, Inc., 2315 N. First Street, San Jose, California 95131, Attention: Investor Relations, or call Cavium’s Investor Relations department at (408) 943-7417, at least two weeks before the Cavium special meeting.

Proxy Solicitations

Cavium is soliciting proxies for the Cavium special meeting from Cavium shareholders. Cavium will bear the entire cost of soliciting proxies from Cavium shareholders. In addition to this mailing, Cavium’s directors, officers and employees (who will not receive any additional compensation for their services) may solicit proxies personally, and by telephone, facsimile, courier service, mail, email, press release or advertisement (including on television, radio, newspapers or other publications of general distribution) or over the Internet. The extent to which this will be necessary depends upon how promptly proxies are returned. Cavium urges you to send in your proxy without delay. MacKenzie Partners, Inc. (“MacKenzie”), has been engaged to aid in the distribution and solicitation of proxies. Cavium will pay MacKenzie a fee estimated not to exceed $25,000 plus a reasonable amount to cover expenses. Cavium has agreed to indemnify MacKenzie against certain liabilities arising out of or in connection with this engagement. Cavium and its proxy solicitors will also request that banks, brokerage houses and other custodians, nominees and fiduciaries send proxy materials to the beneficial owners of Cavium common stock and will, if requested, reimburse them for their reasonable out-of-pocket expenses in doing so.

Cavium shareholders should not submit any stock certificates with their proxy cards.

Cavium shareholders will not need to send in their share certificates or surrender their book-entry shares with their proxy cards. A transmittal form with instructions for the surrender of certificates representing shares of common stock or book-entry shares of common stock, as applicable, will be mailed to Cavium shareholders assuming the Merger is completed.

Assistance

If you need assistance in completing your proxy card or have questions regarding Cavium’s special meeting, you should contact:

MacKenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

Banks and brokers may call collect: (212) 929-5500

All others may call toll-free: (800) 322-2885

 

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PROPOSAL 1

THE MERGER PROPOSAL

As discussed in this joint proxy statement/prospectus, Cavium shareholders are being asked to consider and vote on the Merger Proposal. You should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the transactions contemplated by the Merger Agreement, including the Merger. In particular, you are directed to the Merger Agreement, which is attached as Annex A to this joint proxy statement/prospectus.

AFTER CAREFUL CONSIDERATION, THE CAVIUM BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, AND HAS DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, ARE FAIR TO, ADVISABLE AND IN THE BEST INTERESTS OF CAVIUM AND THE SHAREHOLDERS OF CAVIUM, RESPECTIVELY. ACCORDINGLY, THE CAVIUM BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT CAVIUM SHAREHOLDERS VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT, AND YOUR PROPERLY SIGNED AND DATED PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.

 

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PROPOSAL 2

THE CAVIUM ADJOURNMENT PROPOSAL

Cavium shareholders may be asked to vote on the Cavium Adjournment Proposal to adjourn the Cavium special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the Cavium special meeting to approve the Merger Proposal.

The Cavium board of directors unanimously recommends that Cavium shareholders vote “FOR” the Cavium Adjournment Proposal, and your properly signed and dated proxy will be so voted unless you specify otherwise.

Please note that pursuant to Article III, Section 9 of Cavium’s bylaws, the shareholders entitled to vote thereon and present in person or by remote communication, or represented by proxy are authorized to adjourn the Cavium special meeting by the vote of the majority of the shares present in person, by remote communication, or represented by proxy at the meeting. Additionally, Article III, Section 9 of Cavium’s bylaws generally authorizes the chairman of a special meeting to adjourn the meeting for any or no reason if a quorum is present, and Article III, Section 8 of Cavium’s bylaws authorizes the chairman of a meeting or the shareholders by a vote of the holders of a majority of the shares represented at the meeting, to adjourn a special meeting if a quorum is not present.

Unless the meeting is adjourned to a specific date and time, new notice of the date, time and place for the resumption of the adjourned meeting shall be given to each shareholder in accordance with Cavium’s bylaws.

The Merger Agreement provides that, subject to certain exceptions, Cavium must obtain Marvell’s consent before postponing or adjourning the Cavium special meeting. For more information see “The Merger Agreement—Shareholder Meetings; Proxy Statement/Prospectus.”

 

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PROPOSAL 3

THE CAVIUM NON-BINDING COMPENSATION PROPOSAL

Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that Cavium shareholders be provided with the opportunity to vote to approve, on an advisory, non-binding basis, the payment of certain compensation that will or may become payable by Cavium to its named executive officers in connection with the Merger, as disclosed in the section of this joint proxy statement/prospectus entitled “The Merger—Interests of Cavium Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 128.

Cavium is asking its shareholders to indicate their approval, on an advisory, non-binding basis, of the compensation that will or may become payable by Cavium to its named executive officers in connection with the Merger. These payments are set forth in the section entitled “The Merger—Interests of Cavium Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 128 of this joint proxy statement/prospectus. Certain plans and arrangements pursuant to which these compensation payments may be made formed part of Cavium’s overall compensation program for its named executive officers, and have previously been disclosed to Cavium’s shareholders as part of the Compensation Discussion and Analysis and related sections of its annual proxy statements. The compensation committee of the Cavium board of directors, which is composed solely of non-employee directors, believes the compensatory arrangements to be reasonable.

The Cavium board of directors encourages Cavium shareholders to review carefully the named executive officer Merger-related compensation information disclosed in this joint proxy statement/prospectus. The Cavium board of directors unanimously recommends that you vote “FOR” the following resolution:

“RESOLVED, that the shareholders of Cavium, Inc. approve, on a nonbinding, advisory basis, the compensation that will or may become payable by Cavium to its named executive officers that is based on or otherwise relates to the Merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section entitled “The Merger—Interests of Cavium’s Directors and Executive Officers in the Merger—Golden Parachute Compensation” in the joint proxy statement/prospectus for the shareholder meeting.”

This resolution requires the affirmative vote of the holders of a majority of the shares of Cavium common stock present in person, by remote communication, or represented by proxy and entitled to vote on the matter. Cavium shareholders should note that this proposal is not a condition to completion of the Merger, and as an advisory vote, the result will not be binding on Cavium, the board of directors of Cavium, or Marvell. Further, the arrangements are contractual in nature and not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the Cavium Non-Binding Compensation Proposal, if the Merger is completed, Cavium’s named executive officers may be or become entitled to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments, as described under the section titled “The Merger—Interests of Cavium Directors and Executive Officers in the Merger—Golden Parachute Compensation.”

The board of directors of Cavium believes that the Cavium Non-Binding Compensation Proposal is in the best interests of Cavium and Cavium shareholders and unanimously recommends that you vote “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Cavium to its named executive officers in connection with the Merger.

 

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THE MERGER

Overview

The Marvell board of directors and the Cavium board of directors have each approved the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub, an indirect wholly owned subsidiary of Marvell will merge with and into Cavium, with Cavium continuing as the surviving corporation in the Merger and an indirect wholly owned subsidiary of Marvell.

Pursuant to the terms of the Merger Agreement, each share of Cavium common stock will be canceled and extinguished and automatically converted into the right to receive 2.1757 Marvell common shares and $40.00 in cash, without interest.

Background of the Merger

Each of Cavium’s and Marvell’s board of directors and senior management team regularly review their company’s performance, future growth prospects and overall strategic direction and consider potential opportunities to strengthen their company’s businesses and enhance shareholder value, including the review of their company’s strategy as a stand-alone company and potential opportunities for business combinations, acquisitions and other financial and strategic alternatives.

From time to time, Syed Ali, the Co-Founder, President, Chief Executive Officer and Chairman of the Board of Directors of Cavium, and Matt Murphy, the President and Chief Executive Officer of Marvell, discussed generally Cavium’s and Marvell’s industry and respective businesses, as well as potential partnering opportunities.

On March 27, 2017, Mr. Ali met in person with Mr. Murphy and discussed potential partnering opportunities through product combinations for reference designs. At this meeting, the possibility of a potential strategic transaction between Marvell and Cavium was first raised by Mr. Murphy. No price or other specific terms were discussed at this meeting.

On or about April 13, 2017, Mr. Ali and Mr. Murphy had a telephone call to further discuss potential partnering opportunities, including the possibility of a potential strategic transaction.

In late May 2017, Gary Ignatin, Senior Vice President, Corporate Development of Marvell, contacted a representative of Goldman Sachs to discuss the potential engagement of Goldman Sachs as financial advisor to Marvell in connection with Marvell’s evaluation of certain potential strategic transactions, including a potential transaction between Marvell and Cavium.

In early June 2017, Marvell contacted a representative of Hogan Lovells US LLP (“Hogan Lovells”) to discuss the potential engagement of Hogan Lovells as outside counsel to Marvell in connection with Marvell’s evaluation of certain potential strategic transactions, including a potential transaction between Marvell and Cavium.

On June 12, 2017, Mr. Ali met in person with Mr. Murphy and further discussed the idea of a potential strategic transaction between Marvell and Cavium, including a discussion of the potential benefits of a transaction to both companies.

Between June 13, 2017 and November 17, 2017, Mr. Ali had discussions with various members of Cavium’s board of directors regarding Marvell’s potential interest in a strategic transaction and engaging financial advisors to help evaluate a potential strategic transaction with Marvell or other potentially interested parties, and received strategic advice and input from directors as discussions between representatives of Marvell and representatives of Cavium progressed.

 

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On June 16, 2017, Marvell’s board of directors held a regularly scheduled meeting. During this meeting, Mr. Ignatin discussed recent developments in the semiconductor industry and reviewed potential opportunities for strategic transactions. Mr. Ignatin discussed Cavium’s financial performance, products and technology and discussed the strategic rationale for a potential strategic transaction with Cavium as well as potential valuation matters. Following the discussion, Marvell’s board of directors authorized Marvell’s management to pursue a potential strategic transaction with Cavium and submit a preliminary non-binding proposal to acquire Cavium.

On July 18, 2017, Mr. Ali and Mr. Murphy met in person. Mr. Murphy discussed the concept of an “illustrative” potential strategic transaction where Marvell would purchase all of the outstanding shares of Cavium common stock at a price of $72 per share. The discussion included multiple scenarios on the potential mix of cash and stock, including a scenario where fifty percent would be paid in cash and fifty percent would be paid in Marvell common shares. The “illustrative” $72 price per share represented a premium of approximately 10% over the closing price of Cavium’s common stock on the prior trading day. Mr. Ali indicated that the “illustrative” price per share undervalued Cavium and was thus insufficient. Mr. Murphy requested a meeting with Cavium’s management to review Cavium’s business and financial forecast.

Also on July 18, 2017, Mr. Ali contacted a representative of J.P. Morgan to discuss the potential engagement of J.P. Morgan to act as a financial co-advisor to Cavium in connection with Cavium’s review of potential strategic transactions, including a potential transaction between Marvell and Cavium.

On July 19, 2017, Marvell sent a draft mutual non-disclosure agreement with respect to a potential strategic transaction to Cavium.

On July 20, 2017, Mr. Ali contacted a representative of Qatalyst Partners to discuss the potential engagement of Qatalyst Partners to act as a financial co-advisor to Cavium in connection with Cavium’s review of potential strategic transactions, including a potential transaction between Marvell and Cavium.

On July 21, 2017, Marvell and Cavium entered into a mutual non-disclosure agreement with respect to a potential strategic transaction. The non-disclosure agreement was subsequently amended on November 4, 2017.

On July 26, 2017, Mr. Chadwick, the Chief Financial Officer of Cavium, met in person with Jean Hu, the Chief Financial Officer of Marvell, to discuss the framework for quantifying potential synergies in connection with a potential strategic transaction.

On July 27, 2017, Cavium’s board of directors held a regularly scheduled meeting. At the meeting, Cavium’s board of directors received an update from Cavium’s management on the meetings and communications that had taken place between representatives of Cavium and Marvell, including the “illustrative” $72 per share price proposed by Mr. Murphy. Cavium’s board of directors also discussed engaging J.P. Morgan and Qatalyst Partners to act as financial co-advisors to help evaluate a potential strategic transaction with Marvell or other potentially interested parties.

On August 4, 2017, Messrs. Ali, Chadwick and Raghib Hussain, the Co-Founder and Chief Operating Officer of Cavium, met in person with Mr. Murphy, Mr. Ignatin and Ms. Hu and discussed the potential benefits of a strategic transaction between Cavium and Marvell. At this meeting, the parties also provided high-level overviews of their respective businesses and discussed Marvell’s interest in, and next steps towards, a potential strategic transaction with Cavium.

Between August 8, 2017 and November 17, 2017, Mr. Murphy regularly provided e-mail and telephonic updates to Marvell’s board of directors on the status of discussions that were taking place between representatives of Marvell and representatives of Cavium and received strategic advice and input from directors as those discussions progressed.

 

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On August 11, 2017, Marvell’s board of directors held a meeting. At this meeting, Mr. Ignatin updated Marvell’s board of directors on the meetings and discussions that had taken place between representatives of Marvell and representatives of Cavium. Mr. Ignatin also discussed Cavium’s financial performance, products and technology and reviewed the strategic rationale for a potential strategic transaction with Cavium as well as potential interlopers and deal structures and valuation matters. Following the discussion, Marvell’s board of directors authorized Marvell’s management to continue to pursue a potential strategic transaction with Cavium and to submit a preliminary non-binding proposal to acquire Cavium.

On August 25, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy conveyed to Mr. Ali a preliminary non-binding proposal for Marvell to purchase all of Cavium’s outstanding common stock at a price of $72 per share, $52 of which would be paid in cash and the remaining $20 of which would be paid in Marvell common shares. The per share price proposed represented a premium of approximately 18% over the closing price per share of Cavium’s common stock on the prior trading day. Mr. Ali informed Mr. Murphy that this proposal undervalued Cavium’s products, intellectual property, market position and growth potential and that Marvell would need to increase its proposed price or there would be no reason to continue discussions. Mr. Murphy requested due diligence materials from Cavium.

Also on August 25, 2017, Robert Switz, a member of Marvell’s board of directors, had a telephone call with Sanjay Mehrotra, a member of Cavium’s board of directors, on an unrelated matter. During the call, Mr. Switz indicated that Marvell continued to be interested in pursuing a potential strategic transaction with Cavium.

On August 26, 2017, Mr. Ali and Mr. Murphy exchanged emails regarding setting up further due diligence meetings to discuss potential synergies and Cavium’s anticipated revenue plan. Later that day, Mr. Ali called Mr. Murphy to discuss and gain an understanding of the basis for Marvell’s preliminary non-binding proposal.

Between August 28, 2017 and September 1, 2017, Mr. Chadwick and Ms. Hu had multiple discussions and exchanged emails regarding certain Cavium revenue estimates and potential synergies that might result from a strategic transaction between Cavium and Marvell. Mr. Ignatin and Mr. Hussain had a series of calls and exchanged emails to prepare for due diligence meetings related to Cavium’s business.

On September 1, 2017, Mr. Ali, Mr. Hussain and Mr. Chadwick met with Mr. Murphy, Ms. Hu and Mr. Ignatin to discuss potential synergies from a strategic transaction and certain financial and business due diligence matters.

On September 22, 2017, Marvell’s board of directors held a regularly scheduled meeting. During this meeting, Marvell’s management updated the board of directors on the meetings and discussions that had taken place between representatives of Marvell and representatives of Cavium and provided updates regarding due diligence and potential deal structures and valuation matters. Marvell’s board of directors and management also discussed potential negotiating strategies and current and possible future market conditions. Following the discussion, Marvell’s board of directors authorized Marvell’s management to continue to pursue a potential strategic transaction with Cavium and to submit a preliminary written non-binding indication of interest to Cavium.

On September 26, 2017, Mr. Murphy delivered to Mr. Ali a preliminary, written non-binding indication of interest for Marvell to purchase all of the outstanding shares of Cavium common stock at a price of $75 per share, of which fifty-percent would be paid in cash and fifty-percent would be paid in Marvell common shares. Mr. Murphy indicated that Marvell preferred to have a portion of the consideration consist of Marvell common shares and that this would allow Cavium shareholders to more meaningfully share in Marvell’s future growth potential following a combination of the two companies. The preliminary, written non-binding indication of interest also proposed that Cavium agree to a 30-day exclusivity period for negotiations with Marvell. The $75 price per share contained in the preliminary non-binding indication of interest represented a premium of approximately 17% over the closing price per share of Cavium’s common stock on the prior trading day. Mr. Ali told Mr. Murphy that Marvell’s indication of interest still undervalued Cavium, but that he would discuss the

 

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indication of interest further with Cavium’s board of directors. Following its receipt, Mr. Ali provided the preliminary, written non-binding indication of interest to Cavium’s board of directors.

Also on September 26, 2017, Mr. Murphy encountered Mr. Hussain at an industry event and they briefly discussed the potential strategic transaction between Marvell and Cavium, including the retention of key Cavium employees.

On September 28, 2017, Mr. Murphy provided an update to Marvell’s board of directors regarding his discussion with Mr. Ali on September 26, 2017.

On October 1, 2017, Cavium’s board of directors held a meeting. At the meeting, a representative of Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), outside legal counsel to Cavium, reviewed with the members of Cavium’s board of directors their fiduciary duties in the context of consideration of a strategic transaction. After representatives of Qatalyst Partners and J.P. Morgan joined the meeting, Mr. Ali provided an update on the meetings and communications that had taken place between representatives of Cavium and Marvell. Representatives of Qatalyst Partners and J.P. Morgan discussed with Cavium’s board of directors the financial aspects of the preliminary non-binding indication of interest from Marvell and reviewed strategic alternatives with the board of directors. The Cavium board of directors, together with representatives of Cavium’s management and representatives of Qatalyst Partners, J.P. Morgan and Skadden, also discussed the business environment surrounding Cavium as a stand-alone entity, the competitive environment in the semiconductor industry generally, alternative acquisition targets potentially available to Marvell, acquisition targets potentially available to Cavium and the potential impact on Cavium of various industry merger and acquisition scenarios. The Cavium board of directors, together with Cavium’s management and financial and legal advisors, also reviewed a list of companies provided by Cavium’s financial advisors, and discussed several other companies in the industry, in each case, that could potentially have an interest in engaging in a strategic transaction with Cavium, and discussed the likelihood that each of these companies would have an interest and the ability to consummate a transaction at this time, the potential benefits and risks of reaching out to these companies, and the potential timing of any such contacts in view of those benefits and risks. After the representatives of Qatalyst Partners and J.P. Morgan left the meeting, Cavium’s board of directors authorized Cavium’s management, based on Qatalyst Partners’ and J.P. Morgan’s respective skills, reputations and familiarity with Cavium and the industry in which Cavium operates, to enter into discussions to retain Qatalyst Partners and J.P. Morgan as financial advisors to Cavium at such later time as Cavium’s management believed that the status of any of Cavium’s discussions with Marvell or other potentially interested parties so warranted, subject to satisfactory resolution of any potential conflicts and the negotiation of satisfactory economic terms. Following a lengthy discussion about the importance of achieving the greatest value for Cavium shareholders, as well as a discussion regarding the mix of consideration that may be acceptable to Cavium, Cavium’s board of directors also authorized and directed management to continue its preliminary discussions with Marvell but directed management to seek a higher purchase price from Marvell without providing Marvell a counterproposal or view on the specific mix of consideration at this time.

On October 3, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Ali conveyed to Mr. Murphy that Cavium would not accept Marvell’s preliminary non-binding indication of interest and urged Mr. Murphy to increase Marvell’s proposed consideration. Mr. Ali indicated that, although the proposed price was not acceptable, the proposed consideration of fifty-percent Marvell common shares and fifty-percent cash was potentially acceptable. Mr. Ali also provided feedback on other aspects of Marvell’s preliminary non-binding indication of interest.

On October 5, 2017, Mr. Switz met with Mr. Mehrotra on an unrelated matter. During this meeting, they briefly discussed the potential strategic transaction between Marvell and Cavium, and Mr. Switz conveyed Marvell’s desire to receive a counterproposal to Marvell’s most recent preliminary non-binding indication of interest.

On October 6, 2017, Mr. Murphy and Mr. Ali had a number of telephone calls to discuss the possible terms of a potential strategic transaction between Marvell and Cavium.

 

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On October 9, 2017, Mr. Murphy provided an update to Marvell’s board of directors regarding his discussions with Mr. Ali, including Cavium’s response to Marvell’s non-binding indication of interest.

Later on October 9, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy discussed the potential strategic transaction between Marvell and Cavium, including Cavium’s response to Marvell’s non-binding indication of interest.

On October 12, 2017, Mr. Murphy met with Mr. Ali and delivered a revised written non-binding indication of interest for Marvell to purchase all of the outstanding shares of Cavium common stock at a price of $76.75 per share, of which fifty-percent would be paid in cash and fifty-percent would be paid in Marvell common shares. The revised non-binding indication of interest also required Cavium to agree to a 30-day exclusivity period for negotiations with Marvell and included a draft exclusivity agreement. The price contained in the non-binding indication of interest represented a premium of approximately 11% over the closing price of Cavium’s common stock on the prior trading day. Mr. Ali informed Mr. Murphy that Marvell’s proposal still undervalued Cavium. Following its receipt, Mr. Ali provided the revised non-binding indication of interest to Cavium’s board of directors.

Also on October 12, 2017, Cavium’s board of directors held a meeting. At the meeting, Cavium’s board of directors received an update from Cavium’s management and representatives of Skadden, Qatalyst Partners and J.P. Morgan on the meetings and communications that had taken place between representatives of Cavium and Marvell. With the assistance of Cavium’s management and financial and legal advisors, the board of directors deliberated on the revised non-binding indication of interest from Marvell and discussed the benefits and risks of contacting certain third parties who might have an interest in engaging in a strategic transaction with Cavium. Cavium’s board of directors also considered Marvell’s request for exclusivity, including possible benefits and risks of granting exclusivity, and received advice from its financial and legal advisors. Following a lengthy discussion about the importance of achieving the greatest value for Cavium shareholders, Cavium’s board of directors reaffirmed their interest in pursuing a potential transaction with Marvell but directed management to seek a purchase price of $83.50 per share without specifying the mix of consideration but authorized management to convey that a 50/50 mix of stock and cash would be acceptable. Cavium’s board of directors also authorized and directed Cavium’s management and representatives of Qatalyst Partners and J.P. Morgan to contact certain third parties who might have an interest in engaging in a strategic transaction with Cavium, at the appropriate time, but in any case prior to entering into exclusivity with Marvell.

On October 13, 2017, Mr. Ali communicated to Mr. Murphy that Cavium’s board of directors viewed Marvell’s $76.75 per share proposal as unacceptable, but reiterated Cavium’s continued interest in pursuing a possible strategic transaction with Marvell and indicated that a purchase price of $83.50 per share would be acceptable to Cavium.

On October 14, 2017, Mr. Murphy met with Mr. Ali. During this meeting, Mr. Murphy asked Mr. Ali to decrease the purchase price of Cavium’s most recent counterproposal of $83.50 per share. Mr. Ali declined to decrease the proposal as requested.

On October 15, 2017, Marvell’s board of directors held a meeting. During this meeting, Marvell’s management updated the board of directors on the meetings and discussions that had taken place between representatives of Marvell and representatives of Cavium, including Cavium’s counterproposal of $83.50 per share. Marvell’s board of directors and management also discussed potential negotiating strategies and possible future market conditions. Following the discussion, Marvell’s board of directors authorized Marvell’s management to continue to pursue a potential strategic transaction with Cavium and to make a counterproposal to Cavium.

On October 16, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy conveyed to Mr. Ali that Mr. Murphy was hopeful that Marvell’s board of directors would approve a revised proposal to purchase all of the outstanding shares of Cavium common stock at a price of $78.50 per share, of which fifty-percent would be paid in cash and fifty-percent would be paid in Marvell common shares. Mr. Ali indicated to

 

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Mr. Murphy that even if Marvell’s board of directors approved a proposal of $78.50 per share, Cavium’s board of directors would likely view it as unacceptable and that the price would need to be increased.

On October 18, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy and Mr. Ali discussed Cavium’s counterproposal of $83.50 per share. Mr. Murphy indicated to Mr. Ali that he believed he could obtain approval from Marvell’s board of directors for a revised proposal in the “high $70s per share” but that Cavium would need to show significant movement from its counterproposal as well. Mr. Ali indicated that he would discuss the matter with Cavium’s board of directors and respond to Mr. Murphy with an updated counterproposal.

On October 19, 2017, Mr. Ali called Mr. Murphy to discuss Cavium’s expectations in advance of Cavium’s board meeting. Mr. Ali indicated to Mr. Murphy that he believed Cavium’s board of directors would not accept a proposal below the “low $80s per share.”

Later on October 19, 2017, Cavium’s board of directors held a meeting. At the meeting, Cavium’s board of directors received an update from Cavium’s management and representatives of Skadden, Qatalyst Partners and J.P. Morgan on the meetings and communications that had taken place between representatives of Cavium and Marvell. With the assistance of Cavium’s management and financial and legal advisors, the Cavium board of directors deliberated on the discussions between Mr. Ali and Mr. Murphy regarding Marvell’s price expectations and considered Marvell’s request for exclusivity, including possible benefits and risks of granting exclusivity. Following a lengthy discussion about the importance of achieving the greatest value for Cavium shareholders, Cavium’s board of directors reaffirmed their interest in pursuing a potential transaction with Marvell but directed management to seek a purchase price of $80.50 per share and authorized management to accept a revised indication of interest from Marvell of $80.00 per share or higher. Cavium’s board of directors authorized and directed Cavium’s management and representatives of Qatalyst Partners and J.P. Morgan to contact certain of the companies identified in prior discussions as potentially having an interest in, and the ability to consummate, a strategic transaction with Cavium.

Also on October 19, 2017, a representative of Qatalyst Partners contacted a representative of Party A, to inquire as to whether Party A would be interested in pursuing a potential strategic transaction involving Cavium.

On October 20, 2017, a representative of Qatalyst Partners contacted a representative of Party B, to inquire as to whether Party B would be interested in pursuing a potential strategic transaction involving Cavium. Later on October 20, 2017, a representative of Party B informed a representative of Qatalyst Partners that Party B was not interested in pursuing a potential strategic transaction involving Cavium, because Cavium’s focus on providing highly integrated digital system-on-a-chip solutions was outside of their core area of expertise and focus.

Also on October 20, 2017, Mr. Ali contacted a representative of Party C, to inquire as to whether Party C would be interested in pursuing a potential strategic transaction involving Cavium.

Also on October 20, 2017, a representative of J.P. Morgan contacted representatives of Party D, to inquire as to whether Party D would be interested in pursuing a potential strategic transaction involving Cavium. Representatives of Party D expressed initial interest in evaluating a potential strategic transaction, indicated they will review internally and expressed initial reservation around the potential regulatory issues raised by a potential strategic transaction involving Cavium.

Also on October 20, 2017, a representative of Qatalyst Partners contacted a representative of Party E, to inquire as to whether Party E would be interested in pursuing a potential strategic transaction involving Cavium. Later on October 20, 2017, a representative of Party E informed a representative of Qatalyst Partners that Party E was not interested in pursuing a potential strategic transaction involving Cavium at a valuation that Party E believed Cavium would consider.

On October 22, 2017, a representative of Party A informed a representative of Qatalyst Partners that Party A was not interested in pursuing a potential strategic transaction with Cavium.

 

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Also on October 22, 2017, the chief executive officer of Party C informed Mr. Ali that Party C was not interested in pursuing a potential strategic transaction with Cavium due to various regulatory concerns regarding a potential strategic transaction with Cavium.

On October 23, 2017, Mr. Murphy met with Mr. Ali. During this meeting, Mr. Ali indicated that he expected to be able to provide a revised counterproposal the following day that would show movement from Cavium’s last counterproposal. Mr. Ali also indicated that the counterproposal would include other terms, including a request for board representation and a proposal on determining the exchange ratio.

On October 24, 2017, Mr. Ali called Mr. Murphy to discuss the potential transaction. Mr. Ali indicated that a purchase price of $80.75 per share would be acceptable to Cavium and made proposals on additional matters, including the method for determining the exchange ratio and expected timing for signing a definitive agreement. Mr. Ali also proposed that three members of Cavium’s board of directors join Marvell’s board of directors at the closing of the proposed transaction.

Later on October 24, 2017, Marvell’s board of directors held a meeting. During this meeting, Marvell’s management updated the board of directors on the meetings and discussions that had taken place between representatives of Marvell and representatives of Cavium, including Cavium’s latest counterproposal. Marvell’s board of directors and management also discussed potential negotiating strategies. Following the discussion, Marvell’s board of directors authorized Marvell’s management to continue to pursue a potential strategic transaction with Cavium and to provide a counterproposal to Cavium.

On October 25, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy conveyed to Mr. Ali a revised proposal for Marvell to purchase all of Cavium’s outstanding common stock at a price of $80.00 per share, of which fifty-percent would be paid in cash and fifty-percent would consist of Marvell common shares, subject to Marvell declaring a one-time dividend of $0.50 per Marvell common share payable to Marvell shareholders prior to the closing of the proposed transaction between Marvell and Cavium. The $80.00 per share price represented a premium of approximately 17% over the closing price of Cavium’s common stock on the prior trading day. Mr. Murphy also proposed that two members of Cavium’s board of directors, one of whom would be Mr. Ali, join Marvell’s board of directors at the closing of the proposed transaction. Mr. Ali indicated that he would not discuss a potential future role for himself until the parties agreed upon a price for the potential strategic transaction.

On October 26, 2017, Cavium’s board of directors held a regularly scheduled meeting. At the meeting, Cavium’s board of directors received an update from Cavium’s management and representatives of Qatalyst Partners and J.P. Morgan on the meetings and communications that had taken place between representatives of Cavium and Marvell, including Marvell’s revised per share price and its proposal that two members of Cavium’s board of directors join Marvell’s board of directors at the closing of the proposed transaction. Following a lengthy discussion about the importance of achieving the greatest value for Cavium shareholders, Cavium’s board of directors reaffirmed their interest in pursuing a potential transaction with Marvell but directed management to seek a higher purchase price of $80.00 per share, without a stipulation that Marvell have the right to declare a one-time dividend of $0.50 per Marvell common share payable to Marvell shareholders prior to the closing of the proposed transaction, and request that three members of Cavium’s board of directors join Marvell’s board of directors at the closing of the proposed transaction.

Also on October 26, 2017, Mr. Ali conveyed to Mr. Murphy that Cavium would not accept Marvell’s revised proposal and advised Mr. Murphy that Cavium’s board of directors had authorized him only to accept $80.00 per share and noted that the practical effect of Marvell’s revised proposal, which included the right of Marvell to declare a one-time dividend of $0.50 per Marvell common share payable to Marvell shareholders prior to the closing of the proposed transaction between Marvell and Cavium, would be to reduce the value of each Marvell common share that Cavium shareholders would receive and thus would result in an effective purchase price below $80.00 per share. Mr. Ali reiterated Cavium’s request that three members of Cavium’s board of directors join Marvell’s board of directors at the closing of the proposed transaction.

 

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Also on October 26, 2017, a representative of Party D informed a representative of J.P. Morgan that while there could be a strategic fit between Party D and Cavium, Party D was not interested in pursuing a strategic transaction due to various regulatory concerns regarding a potential strategic transaction involving Cavium.

On October 27, 2017, Marvell’s board of directors held a meeting. During this meeting, Marvell’s management provided an update to the board of directors on the discussions that had taken place between representatives of Marvell and representatives of Cavium. Following the discussion, Marvell’s board of directors authorized Marvell’s management to continue to pursue a potential strategic transaction with Cavium and to submit a revised proposal to Cavium.

Later on October 27, 2017, Mr. Murphy had a telephone call with Mr. Ali. During this call, Mr. Murphy conveyed to Mr. Ali a revised proposal for Marvell to purchase all of Cavium’s outstanding common stock at a price of $80.00 per share, of which fifty-percent would be paid in cash and fifty-percent would be paid in Marvell common shares using an exchange ratio to be based on the volume weighted average closing price of Marvell’s common shares for a period of five trading days ending two trading days before the public announcement of the proposed transaction, without a stipulation that Marvell have the right to declare a one-time dividend of $0.50 per Marvell common share payable to Marvell shareholders prior to the closing of the proposed transaction. The per share price represented a premium of approximately 19% over the closing price of Cavium’s common stock on the prior trading day. Mr. Murphy also proposed that three members of Cavium’s board of directors, one of whom would be Mr. Ali, join Marvell’s board of directors at the closing of the proposed transaction. Mr. Ali reiterated that he would not discuss a potential future role for himself until the parties agreed upon a price for the potential strategic transaction. Following its receipt, Mr. Ali advised Cavium’s board of directors of the terms of the revised proposal.

Also on October 27, 2017, representatives of Skadden delivered a draft of an amendment to the non-disclosure agreement, which included a standstill provision and non-solicitation provision, and a revised draft of the exclusivity agreement to representatives of Hogan Lovells.

On October 28, 2017, representatives of Hogan Lovells delivered a revised draft of the amendment to the non-disclosure agreement to representatives of Skadden.

On October 29, 2017, representatives of Cavium, Qatalyst Partners and J.P. Morgan met with representatives of Marvell and Goldman Sachs to discuss, among other things, communications strategy and the timeline for the potential transaction.

Also on October 29, 2017, representatives of Hogan Lovells delivered a revised draft of the exclusivity agreement to representatives of Skadden.

Also on October 29, 2017, representatives of Marvell delivered a due diligence request list to representatives of Cavium.

On October 30, 2017, representatives of Skadden delivered a draft outline of Cavium’s position on certain key terms for the proposed transaction to representatives of Hogan Lovells.

Also on October 30, 2017, representatives of Skadden delivered revised drafts of the amendment to the non-disclosure agreement and the exclusivity agreement to representatives of Hogan Lovells.

Also on October 30, 2017, representatives of Qatalyst Partners delivered a reverse due diligence request list to representatives of Marvell and Goldman Sachs.

Also on October 30, 2017, representatives of Marvell delivered to representatives of Cavium an agenda for the upcoming due diligence and reverse due diligence meetings between Cavium and Marvell.

On October 31, 2017, representatives of Cavium, Marvell and Ernst & Young LLP, consultants to Marvell providing human resources due diligence services, held meetings to discuss human resources and legal due diligence matters.

 

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Also beginning on October 31, 2017, representatives of Marvell began evaluating the compensation for certain key employees of Cavium, including Messrs. Hussain and Jain, for the purpose of delivering offer letters, which would be contingent upon the closing of the proposed transaction, and non-competition agreements to be signed by key employees of Cavium, including Mr. Ali.

On November 1, 2017, representatives of Hogan Lovells delivered revised drafts of the amendment to the non-disclosure agreement and the exclusivity agreement to representatives of Skadden. Later on November 1, 2017, representatives of Skadden delivered a revised draft of the amendment to the non-disclosure agreement to representatives of Hogan Lovells.

On November 2, 2017, management presentations were given by representatives of Cavium, during which representatives of Marvell conducted due diligence on Cavium. Representatives of Marvell, Hogan Lovells, Goldman Sachs, Skadden, Qatalyst Partners and J.P. Morgan attended these presentations.

Also on November 2, 2017, Cavium’s board of directors held a meeting. At this meeting, Cavium’s board of directors received an update from Cavium’s management and Skadden on the meetings and communications that had taken place between representatives of Cavium and Marvell. Cavium’s management and board of directors discussed the anticipated next steps for discussions with representatives of Marvell, the scope of Cavium’s reverse due diligence investigation of Marvell in relation to the stock component of Marvell’s proposal and the status of discussions with other potential interested parties. During the discussion it was noted that Party A, Party B, Party C, Party D and Party E had all indicated that they were not interested in pursuing a potential strategic transaction with Cavium at that time. Cavium’s board of directors also discussed the fact that the merger agreement with Marvell would be negotiated to preserve the ability of Cavium’s board of directors to consider superior offers should any interested parties emerge following the announcement of a strategic transaction with Marvell. Cavium’s management and board of directors discussed formally retaining Qatalyst Partners and J.P. Morgan as financial advisors to Cavium, and, after reviewing draft engagement letters between Cavium and each of Qatalyst Partners and J.P. Morgan as financial advisors, Cavium’s board of directors determined to engage Qatalyst Partners and J.P. Morgan. Following such review, representatives of Skadden discussed with the board of directors certain regulatory matters that may be relevant to the proposed transaction with Marvell.

Also on November 2, 2017, Cavium made available to Marvell and its representatives an online data room containing certain information concerning Cavium.

Also on November 2, 2017, representatives of Cavium and Skadden met with representatives of Marvell and Hogan Lovells to discuss the terms of the amendment to the non-disclosure agreement and the exclusivity agreement being negotiated between Cavium and Marvell.

Later on November 2, 2017, Cavium formally engaged each of Qatalyst Partners and J.P. Morgan as Cavium’s respective financial advisors and executed engagement letters with each of Qatalyst Partners and J.P. Morgan.

On November 3, 2017, management presentations were given by representatives of Marvell, during which representatives of Cavium conducted reverse due diligence on Marvell. Representatives of Cavium, Skadden, Qatalyst Partners, J.P. Morgan, Hogan Lovells and Goldman Sachs attended these presentations.

After the close of the trading day on November 3, 2017, a report from anonymous sources appeared in the Wall Street Journal stating that Marvell and Cavium were in advanced discussions regarding a potential strategic transaction. The closing price of Cavium’s common stock on the prior trading day, November 2, 2017, was $66.01 per share, compared to a closing price of $76.43 per share on the following trading day, November 6, 2017. The closing price of Marvell’s common shares on November 2, 2017 was $18.28 per share, compared to a closing price of $20.20 per share on November 6, 2017, the trading day following the Wall Street Journal report.

On November 4, 2017, representatives of Cavium and Marvell met to discuss the communications strategy and the timeline for the potential transaction.

 

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Also on November 4, 2017, Cavium and Marvell entered into an amendment to the non-disclosure agreement between Cavium and Marvell, which included both a customary nine-month non-solicitation provision and a customary nine-month standstill provision.

Also on November 4, 2017, Cavium and Marvell entered into an exclusivity agreement, providing among other things that neither Cavium nor Marvell would solicit, initiate or participate in discussions regarding a potential strategic transaction with any third party through November 28, 2017.

Also on November 4, 2017, representatives of Cavium, Skadden, Marvell and Hogan Lovells had a telephone call to discuss due diligence and reverse due diligence matters.

Also on November 4, 2017, Marvell made available to Cavium and its representatives an online data room containing certain information concerning Marvell.

On November 5, 2017, Mr. Murphy exchanged emails with Mr. Hussain regarding certain key employees of Cavium with whom Marvell may want to enter into employment offer letters, including Messrs. Hussain and Jain, and Syed Zaheer, Vice President of Operations of Cavium, which would be contingent upon the closing of the proposed transaction.

On November 7, 2017, representatives of Hogan Lovells delivered an initial draft of the merger agreement to representatives of Skadden, which draft included, among other things, a provision for three members of Cavium’s board of directors, one of whom would be Mr. Ali, to join Marvell’s board of directors at the closing of the proposed transaction.

Also on November 7, 2017, Mitchell Gaynor, Chief Administration and Legal Officer and Secretary of Marvell, Janice Hall, Vice President of Human Resources of Marvell, and Mr. Hussain discussed compensation and employment matters for certain key employees of Cavium with whom Marvell may want to enter into employment offer letters, including Messrs. Hussain, Jain, and Zaheer, which would be contingent upon the closing of the proposed transaction.

On November 7, 2017 and November 8, 2017, representatives of Cavium, Skadden, Marvell and Hogan Lovells held a series of due diligence and reverse due diligence telephone calls regarding various aspects of Cavium’s and Marvell’s respective businesses.

On November 8, 2017, representatives of Company F contacted Mr. Ali regarding a potential business combination of Cavium and Company F. Mr. Ali did not respond to Party F due to Cavium’s obligations under the exclusivity agreement with Marvell.

On November 9, 2017, Ms. Hu had a telephone call with representatives of PricewaterhouseCoopers LLP and representatives of Qatalyst Partners regarding financial and reverse tax due diligence matters.

Also on November 9, 2017, Cavium’s board of directors held a meeting. At the meeting, Cavium management and representatives of Skadden, Qatalyst Partners and J.P. Morgan provided an update on the status of negotiations with Marvell. Cavium’s board of directors, with the assistance of Cavium’s management and financial and legal advisors, also discussed Party F’s expression of interest regarding a potential business combination with Cavium, as well as a presentation and discussion of the results of the reverse due diligence investigation Cavium had conducted on Marvell to date. Representatives of Skadden also reviewed certain legal and regulatory considerations in connection with a potential transaction with Marvell. The Cavium board of directors also discussed challenges that Party F would face in providing superior value compared to the transaction proposed by Marvell and the fact that the merger agreement would preserve the ability of Cavium’s board of directors to consider superior offers should any interested parties emerge following the announcement of any strategic transaction with Marvell. The Cavium board of directors also discussed certain management projections and forecasts for Cavium, forecasts for Marvell and forecasts relating to anticipated synergies, in

 

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each case identified in “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information,” and directed each of Qatalyst Partners and J.P. Morgan to use these management projections and forecasts, or subsets thereof, for their respective valuation analyses. For further information regarding these management projections and forecasts, please see “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information.”

On November 10, 2017, representatives of Skadden delivered a revised draft of the merger agreement to representatives of Hogan Lovells.

On November 11, 2017, Marvell’s board of directors held a meeting. At the meeting, Marvell’s management provided an update on the status of negotiations with Cavium and the market reaction to rumors of a potential transaction between Marvell and Cavium that were first reported in the Wall Street Journal. Following that update, Marvell’s board of directors and management discussed potential negotiating strategies. Marvell’s management also reviewed the terms of the proposed financing for the potential strategic transaction with Cavium and related materials with Marvell’s board of directors. Marvell’s board of directors and management also discussed formally retaining Goldman Sachs as financial advisor to Marvell in connection with the potential strategic transaction with Cavium, and, after reviewing the terms of the draft engagement letter between Marvell and Goldman Sachs, Marvell’s board of directors authorized the engagement of Goldman Sachs.

Later on November 11, 2017, Mr. Ali had a telephone call with Mr. Murphy. During the call, Mr. Ali and Mr. Murphy agreed to use an exchange ratio based on the volume weighted average price for Marvell common shares during a five trading day period prior to November 2, 2017, the last full day before rumors of a potential transaction between Cavium and Marvell were first reported in the Wall Street Journal.

Also on November 11, 2017, representatives of Cavium and Skadden met with representatives of Marvell and Hogan Lovells to negotiate the merger agreement.

On November 12, 2017, representatives of Cavium and Skadden met with representatives of Marvell and Hogan Lovells to continue to negotiate the merger agreement.

Also on November 12, 2017, Cavium agreed that the exchange ratio would be calculated based on the volume weighted average price for Marvell common shares during a five trading day period up to and including October 31, 2017, which represents the date two trading days prior to November 2, 2017, the last full day before rumors of a potential transaction between Cavium and Marvell were first reported in the Wall Street Journal.

Also on November 12, 2017, Cavium’s board of directors held a meeting. At the meeting, Cavium management and representatives of Skadden, Qatalyst Partners and J.P. Morgan provided an update on the status of negotiations with Marvell. The Cavium board of directors discussed key remaining issues in the merger agreement negotiation, including efforts required to obtain regulatory approvals and reverse termination fees payable by Marvell in the event certain regulatory approvals were not obtained, including CFIUS and MOFCOM approvals, as well as the termination fee payable by Cavium in the event that, among other situations, Cavium were to terminate the merger agreement to enter into an alternative transaction. Cavium’s board of directors also received a presentation from PricewaterhouseCoopers LLP regarding the status and findings of Cavium’s ongoing due diligence investigation of Marvell from finance, accounting and tax perspectives.

On November 13, 2017, representatives of Hogan Lovells delivered initial drafts of the respective voting agreements for Starboard Value LP and certain of its affiliates (“Starboard”) and Mr. Ali to representatives of Skadden. As of that date, Starboard beneficially owned approximately 6.8% of Marvell’s issued common shares and Mr. Ali beneficially owned approximately 2.6% of the outstanding shares of Cavium common stock.

Also on November 13, 2017, Marvell executed an engagement letter to formally engage Goldman Sachs as its financial advisor.

 

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On November 14, 2017, representatives of Hogan Lovells delivered a revised draft of the merger agreement to representatives of Skadden.

Also on November 14, 2017, Mr. Gaynor delivered employment offer letters to certain key employees of Cavium, including Messrs. Hussain, Jain, and Zaheer, which would be contingent upon the closing of the proposed transaction.

On November 15, 2017, representatives of Skadden delivered a revised draft of the merger agreement and the initial draft of Cavium’s disclosure schedule to the merger agreement to representatives of Hogan Lovells.

Also on November 15, 2017, representatives of Cavium, Skadden, Marvell and Hogan Lovells had multiple due diligence and reverse due diligence telephone calls regarding various aspects of Cavium’s and Marvell’s respective businesses.

Also on November 15, 2017, representatives of Skadden delivered a revised draft of the voting agreements for Starboard and Mr. Ali to representatives of Hogan Lovells.

Between November 15, 2017 and November 20, 2017, Mr. Gaynor and certain key employees of Cavium, including Messrs. Hussain and Jain, negotiated the terms and exchanged drafts of their respective employment offer letters.

On November 16, 2017, Cavium’s board of directors held a meeting. At the meeting, Cavium management and representatives of Skadden, Qatalyst Partners and J.P. Morgan provided an update on the status of the merger agreement and negotiations with Marvell. The Cavium board of directors discussed key remaining issues in the merger agreement negotiation, including efforts required to obtain regulatory approvals and reverse termination fees payable by Marvell in the event certain regulatory approvals were not obtained, including CFIUS and MOFCOM approvals, as well as the termination fee payable by Cavium in the event that, among other situations, Cavium were to terminate the merger agreement to enter into an alternative transaction.

On November 17, 2017, representatives of Hogan Lovells delivered a revised draft of the merger agreement, a revised draft of Cavium’s disclosure schedule to the merger agreement, the initial draft of Marvell’s disclosure schedule to the merger agreement and the initial draft of the debt commitment letter, described under the section “The Merger Agreement—Financing Matters” below, from Goldman Sachs Bank USA, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated to representatives of Skadden.

Also on November 17, 2017, representatives of Cavium, Qatalyst Partners and J.P. Morgan had a telephone call with representatives of Marvell and Goldman Sachs regarding business due diligence and reverse business due diligence matters.

Also on November 17, 2017, representatives of Cavium, Skadden, Marvell, Hogan Lovells and Cravath, Swaine & Moore LLP, counsel to Marvell’s financing sources, had a telephone call to discuss due diligence matters.

Between November 17, 2017 and November 19, 2017, representatives of Cavium, Skadden, Marvell and Hogan Lovells negotiated the terms and exchanged drafts of the merger agreement and the respective disclosure schedules of Cavium and Marvell.

On November 18, 2017, Cavium’s board of directors held a meeting. At this meeting, Cavium’s board of directors received an update from Cavium’s management and representatives of Skadden, Qatalyst Partners and J.P. Morgan regarding the status of discussions with Marvell. Skadden representatives also reviewed certain legal and regulatory considerations in connection with a potential transaction with Marvell and provided a summary of the current proposed terms of the merger agreement, which included a termination fee equal to approximately 3% of the proposed transaction consideration payable in the event that, among other situations, Cavium were to terminate the merger agreement to enter into an alternative transaction. Skadden representatives noted that the

 

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key remaining issue in the merger agreement negotiation involved reverse termination fees payable by Marvell in the event certain regulatory approvals were not obtained, including CFIUS and MOFCOM approvals. Cavium’s board of directors and management considered recent discussions with Marvell, and together with its legal and financial representatives, discussed the results of the due diligence investigation Cavium had conducted on Marvell. Representatives of Qatalyst Partners and J.P. Morgan then presented an overview of the proposed transaction and their financial analysis of the merger consideration.

On November 18, 2017, Marvell’s board of directors held a meeting in which Marvell’s management and representatives from Goldman Sachs and Hogan Lovells participated. During the meeting, Marvell’s management made a presentation to the board of directors regarding the business, financial and other aspects of the potential transaction with Cavium and the outcome of management’s due diligence review of Cavium. A representative of Hogan Lovells reviewed certain legal and regulatory considerations in connection with the potential transaction with Cavium and provided a summary of the principal terms of the merger agreement and other transaction documentation. Members of the board of directors asked questions and discussed the potential transaction with Marvell’s management. Marvell’s board of directors also received a presentation from representatives of Goldman Sachs with respect to its financial analyses of the potential transaction and representatives of Goldman Sachs rendered its oral opinion to Marvell’s board of directors, subsequently confirmed in writing by delivery of a written opinion dated as of November 19, 2017, that as of the date of the written opinion and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock pursuant to the merger agreement was fair from a financial point of view to Marvell. The full text of the written opinion of Goldman Sachs, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex B. After further consideration and consultation with its advisors, including consideration of the factors described under the section “ —Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors” below in this joint proxy statement/prospectus, Marvell’s board of directors determined that the Merger and the Marvell Share Issuance were fair to and in the best interests of Marvell and Marvell’s shareholders, and authorized the execution of the definitive merger agreement and related transaction documents.

On November 19, 2017, Cavium’s board of directors held a meeting. At this meeting, Cavium’s board of directors received an update from Cavium’s management and representatives of Skadden, Qatalyst Partners and J.P. Morgan regarding the status of discussions with Marvell. Skadden representatives also reviewed certain legal and regulatory considerations in connection with a potential transaction with Marvell. Representatives of Qatalyst Partners then rendered Qatalyst Partners’ oral opinion, which was subsequently confirmed in writing, to the Cavium board of directors that, as of the date of Qatalyst Partners’ opinion and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Qatalyst Partners as set forth in Qatalyst Partners’ opinion, the merger consideration to be received pursuant to, and in accordance with, the merger agreement by the holders of shares of Cavium common stock (other than Marvell or any of its affiliates) was fair, from a financial point of view, to such holders, as more fully described below under the caption “ —Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan—Opinion of Qatalyst Partners.” Representatives of J.P. Morgan then rendered J.P. Morgan’s oral opinion, which was subsequently confirmed in writing, to the Cavium board of directors that, as of the date of J.P. Morgan’s opinion and based upon and subject to the factors and assumptions set forth in J.P. Morgan’s opinion, the consideration to be paid to the holders of shares of Cavium common stock was fair, from a financial point of view, to such holders, as more fully described below under the caption “ —Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan—Opinion of J.P. Morgan.” After further consideration and consultation with its advisors, including consideration of the factors described under the section “ —Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors” below in this joint proxy statement/prospectus, Cavium’s board of directors determined that the merger agreement and the transactions contemplated thereby were advisable, fair to and in the best interests of Cavium and Cavium’s shareholders, and authorized management to execute the final definitive agreement with Marvell.

 

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Following final negotiations, the parties executed and delivered the merger agreement and related transaction documents. Cavium and Marvell jointly announced the transactions on the morning of November 20, 2017.

Marvell’s Reasons for the Merger and Recommendation of Marvell’s Board of Directors

By a vote at a meeting of the Marvell board of directors held on November 18, 2017, the Marvell board of directors unanimously determined that the Merger and the Marvell Share Issuance, on the terms and subject to the conditions set forth in the Merger Agreement, were fair to, and in the best interests of, Marvell and its shareholders and approved the Merger Agreement, the Marvell Share Issuance and the other transactions contemplated by the Merger Agreement. The Marvell board of directors unanimously recommends that Marvell shareholders vote “FOR” the approval of the Marvell Share Issuance and “FOR” the Marvell Adjournment Proposal.

In evaluating the proposed Merger, the Marvell board of directors consulted with Marvell’s management and legal and financial advisors and, in reaching its determination and recommendation, the Marvell board of directors considered a number of factors. The Marvell board of directors also consulted with its outside legal counsel regarding legal due diligence matters and the legal terms of the Merger Agreement and with its financial advisors regarding the financial terms of the Merger Agreement.

Many of the factors considered favored the conclusion of the Marvell board of directors that the Merger and the Marvell Share Issuance were fair to and in the best interests of Marvell and its shareholders, including the following (not in any relative order of importance):

 

    the highly complementary product portfolios and end-market exposure of the businesses of Marvell and Cavium and the expectation that the combined company will be able to create the scale and breadth to deliver more innovative and complete end-to-end solutions to its customers across the cloud data center, enterprise and service provider markets by combining Marvell’s portfolio of leading HDD and SSD storage controllers, networking solutions and high-performance wireless connectivity products with Cavium’s portfolio of leading multi-core processing, networking communications, storage connectivity and security solutions;

 

    the expectation that the combination of Cavium’s leadership in multi-core processors, security and fibre channel and Marvell’s leadership in Ethernet and storage presents a unique opportunity for the combined company to emerge as a leader in infrastructure solutions;

 

    the opportunity for the combined company to become a R&D innovation engine to accelerate product development, positioning the combined company to meet today’s massive and growing demand for solutions encompassing data storage, heterogeneous computing and high-speed connectivity;

 

    the expectation based on estimates by Marvell’s management prior to the execution of the Merger Agreement that Marvell would achieve annual run-rate synergies of at least $150 million to $175 million within 18 months following the completion of the Merger;

 

    the expectation based on estimates by Marvell’s management prior to the execution of the Merger Agreement that the serviceable addressable market for the combined company will expand to more than $16 billion;

 

    the expectation based on estimates by Marvell’s management prior to the execution of the Merger Agreement that the Merger will be accretive to Marvell’s revenue, margins and non-GAAP earnings per share in the first full year following the completion of the Merger;

 

    the expectation of the Marvell board of directors, following consultation with Marvell’s management, that the combined company would be able to execute and deliver on its business plans throughout the business cycle and in a semiconductor industry that is highly competitive, cyclical and subject to constant and rapid technological change;

 

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    the opportunity to further expand the combined company’s global market reach and customer base and expand into other business areas of strategic importance;

 

    the opportunity to combine expertise, and skills of experienced managers in the semiconductor industry, in order to meet the needs of the customers of both Marvell and Cavium, and for the combined company to access Cavium’s intellectual property portfolio and other resources after the completion of the Merger;

 

    the expectation that the larger scale organization, greater marketing resources and financial strength of the combined company will lead to improved opportunities for marketing and cross-selling the combined company’s products;

 

    the expected generation, based on estimates by Marvell’s management prior to the execution of the Merger Agreement, of strong operating cash flow, which is anticipated to permit the combined company to deleverage to a ratio of consolidated total indebtedness to consolidated EBITDA of 1.3 to 1 within eight quarters after the completion of the Merger;

 

    the probability that regulatory approvals for the Merger would be obtained in a timely manner without the imposition of any conditions that Marvell would find unacceptable;

 

    the fact that, based on the Marvell common shares then issued, Marvell shareholders are expected to own shares of the combined company representing approximately 75% of the combined company’s issued shares immediately following the completion of the Merger;

 

    information and discussions with Marvell’s management and advisors regarding Cavium’s business, assets, financial condition, results of operations, reputation, current business strategy and prospects, including the projected long-term financial results of Cavium as a standalone company, the size and scale of the combined company and the expected pro forma effect of the proposed Merger on the combined company;

 

    the fact that Mr. Ali, Cavium’s Co-Founder, Chief Executive Officer and Chairman of the board of directors, as well as two other members of Cavium’s board of directors who will be designated by Marvell, will become members of the Marvell board of directors as of the Effective Time, which will provide additional semiconductor industry expertise to the Marvell board of directors and guidance on the integration of Cavium and Marvell, and that the Marvell board of directors and senior management would otherwise continue as members of the board of directors and senior management of Marvell;

 

    that six key Cavium employees executed offer letters with Marvell, with their employment by Marvell contingent upon the completion of the Merger;

 

    the belief that the Marvell management team will be able to successfully integrate the two companies;

 

    the oral opinion of Goldman Sachs rendered to the Marvell board of directors on November 18, 2017, subsequently confirmed in writing by delivery of a written opinion, that, as of such date and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock, pursuant to the Merger Agreement was fair to Marvell from a financial point of view, such opinion more fully described below in the section entitled “The Merger—Opinion of Marvell’s Financial Advisor, Goldman Sachs;

 

    the fact that the Starboard Shareholders have signed a voting agreement obligating the Starboard Shareholders to vote all Marvell common shares owned by them in favor of the approval of the Marvell Share Issuance until termination of the voting agreement, which occurs automatically upon the earliest of certain conditions, including termination of the Merger Agreement, the effective date of the Merger, Cavium’s board of directors changing its recommendation regarding the adoption of the Merger Agreement, Marvell’s board of directors changing its recommendation regarding the approval of the Marvell Share Issuance or a Cavium Triggering Event (as more fully described in the section entitled “The Merger—Voting Agreements”);

 

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    the fact that Mr. Ali has signed a voting agreement obligating Mr. Ali to vote his Cavium shares in favor of the adoption of the Merger Agreement and the approval of the Merger and the other transactions contemplated by the Merger Agreement until termination of the voting agreement, which occurs automatically upon the earliest of certain conditions, including termination of the Merger Agreement, the effective date of the Merger, Cavium’s board of directors changing its recommendation regarding the adoption of the Merger Agreement, Marvell board of directors changing its recommendation regarding the approval of the Marvell Share Issuance or a Marvell Triggering Event (as more fully described in the section entitled “The Merger—Voting Agreements”);

 

    the review by the Marvell board of directors with its advisors of the structure of the proposed Merger and the financial and other terms of the Merger Agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions, as well as the likelihood of the completion of the Merger and the evaluation by the Marvell board of directors of the likely time period necessary to complete the Merger. The Marvell board of directors also considered the following specific aspects of the Merger Agreement:

 

    the fact that the Exchange Ratio is fixed and will not adjust to compensate for any decrease in the trading price of Marvell common shares prior to the completion of the Merger, which provides certainty to Marvell shareholders as to their pro forma percentage ownership of the combined company;

 

    the limited number and nature of the conditions to Cavium’s obligation to complete the Merger included in the Merger Agreement, as well as the probability that those conditions to Cavium’s obligation to complete the Merger would be satisfied prior to 11:59 p.m. (New York City time) on September 19, 2018, subject to certain exceptions (the “Outside Date”);

 

    the conditions to Marvell’s obligation to complete the Merger, as well as the probability that these conditions to Marvell’s obligation to complete the Merger would be satisfied prior to the Outside Date;

 

    the extensive representations and warranties made by Cavium, as well as the interim operating covenants agreed to by Cavium requiring Cavium to conduct its business in the ordinary course prior to completion of the Merger, subject to certain limitations;

 

    the fact that the Merger Agreement includes restrictions on the ability of Cavium to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to certain exceptions and Marvell’s right to match any such proposals;

 

    the ability of Marvell to terminate the Merger Agreement and receive a $180 million termination fee from Cavium in the event the Cavium board of directors changes its recommendation regarding the adoption of the Merger Agreement;

 

    Marvell’s right to engage in negotiations with, and provide information to, a third party that makes an unsolicited proposal that is received prior to the approval of the Marvell Share Issuance by Marvell shareholders and relates to an alternative transaction if the Marvell board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Marvell’s outside legal counsel, that (a) such proposal is, or could reasonably be expected to lead to, a superior offer and (b) failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation);

 

   

the right of the Marvell board of directors to change its recommendation regarding the approval of the Marvell Share Issuance, including to recommend a superior offer, if the Marvell board of directors has determined in good faith, after having taken into account the advice of an

 

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independent financial advisor of nationally recognized reputation and Marvell’s outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (including in connection with a termination of the Merger Agreement by Cavium as a result of such change of recommendation by the Marvell board of directors, the payment by Marvell to Cavium of a $180 million termination fee) (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation”);

 

    the belief of the Marvell board of directors, following consultation with its advisors, and based in part upon the financing commitments that it had obtained, that it was likely that Marvell would be able to obtain the necessary financing to pay a portion of the cash portion of the Merger Consideration and refinance existing Cavium indebtedness, and that after completing the Merger, Marvell would be able to repay, service or refinance the indebtedness incurred in connection with the Merger and, to the extent such indebtedness remains outstanding, to comply with the financial covenants applicable to such indebtedness, after its review and discussion of various factors, including the terms of the proposed financing for the Merger (including fees and interest);

 

    the belief of the Marvell board of directors, following consultation with its advisors, that the financing commitments it had obtained to pay a portion of the cash portion of the Merger Consideration and to refinance certain of Cavium’s existing indebtedness were sufficient for such purposes and on attractive terms for Marvell;

 

    the fact that if Marvell shareholders fail to approve the Marvell Share Issuance, Marvell would have no liability to Cavium under the Merger Agreement (unless it accepts or completes an alternative transaction within 12 months of termination of the Merger Agreement under certain circumstances, in which event Marvell will pay a $180 million termination fee to Cavium); and

 

    the fact that Marvell’s maximum liability to Cavium under the Merger Agreement in the event of a failure to obtain required consents, approvals or clearances by applicable regulatory authorities is a $180 million termination fee to Cavium, subject to certain exceptions.

In the course of its deliberations, the Marvell board of directors also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

 

    the possibility that the Merger may not be completed or that completion may be unduly delayed for reasons beyond the control of Marvell, including the potential length of the regulatory review process and the risk that CFIUS and/or applicable antitrust and competition authorities may prohibit or enjoin the proposed Merger or otherwise impose conditions on Marvell and/or Cavium to obtain clearance for the Merger;

 

    the potential dilution to Marvell shareholders;

 

    the fact that Marvell’s refinancing of Cavium’s existing indebtedness (along with the incurrence of additional indebtedness to fund a portion of the cash portion of the Merger Consideration payable in connection with the Merger) may, at least in the short term, among other things, reduce Marvell’s operational flexibility;

 

    the fact that Marvell’s obligations pursuant to the Merger Agreement are not subject to any financing condition or similar contingency based on Marvell’s ability to obtain financing, and that Cavium would be entitled to specifically enforce the Merger Agreement, including the obligations of Marvell to complete the Merger, regardless of the availability or terms of Marvell’s financing;

 

    the possible disruption to Marvell’s business that may result from the Merger, including the potential for diversion of management and employee attention from other strategic opportunities or operational matters and for increased employee attrition during the period prior to completion of the Merger, and the potential effect of the Merger on Marvell’s business and relations with customers and suppliers;

 

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    the adverse impact that business uncertainty pending completion of the Merger could have on Marvell’s ability to attract, retain and motivate key personnel;

 

    the challenges of combining the businesses, operations and workforces of Cavium and Marvell and the risk that anticipated strategic and other benefits to Marvell and Cavium following completion of the Merger, including the synergies described above, will not be realized or will take longer to realize than expected;

 

    the fact that the Exchange Ratio is fixed and will not adjust for any increase in the trading price of Marvell common shares prior to completion of the Merger;

 

    certain terms and conditions of the Merger Agreement, including:

 

    the restrictions on Marvell’s ability to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to certain exceptions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation”);

 

    Cavium’s right to engage in negotiations with, and provide information to, a third party that makes an unsolicited proposal that is received prior to the approval of the Merger Proposal by Cavium’s shareholders and relates to an alternative transaction if the Cavium board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Cavium’s outside legal counsel that (a) such proposal is, or could reasonably be expected to lead to, a superior offer and (b) failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation”);

 

    the right of the Cavium board of directors to change its recommendation regarding the adoption of the Merger Agreement, including to recommend a superior offer, if the Cavium board of directors has determined in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Cavium’s outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation”);

 

    the restrictions on the ability of the Marvell board of directors to change its recommendation regarding the approval of the Marvell Share Issuance, and to recommend a superior offer, subject to certain exceptions and conditions (including in connection with a termination of the Merger Agreement by Cavium as a result of such change of recommendation by the Marvell board of directors, the payment by Marvell to Cavium of a $180 million termination fee), which could have the effect of discouraging such proposals from being made or pursued;

 

    the requirement that Marvell provide Cavium with an opportunity to propose revisions to the Merger Agreement prior to Marvell being able to terminate the Merger Agreement to accept a superior offer;

 

    the requirement that Marvell pay a termination fee of $180 million to Cavium if CFIUS Approval has not been obtained and the Merger Agreement is terminated under certain circumstances or pay a termination fee of $50 million to Cavium if MOFCOM approval has not been obtained and the Merger Agreement is terminated under certain circumstances (as more fully described in the section entitled “The Merger Agreement—Transaction Expenses and Termination Fees”); and

 

    the fact that Marvell’s current shareholders will have a reduced ownership and voting interest in Marvell after the completion of the Merger and will exercise less influence over the Marvell board of directors and management and policies of Marvell;

 

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    the transaction costs to be incurred in connection with the Merger, regardless of whether the Merger is completed;

 

    the risks and contingencies relating to the announcement and pendency of the Merger and the risks and costs to Marvell if the Merger is not completed on a timely basis or at all, including the impact on Marvell’s relationships with employees, with customers and with third parties;

 

    the fact that if the Merger is not completed, Marvell will have expended significant human and financial resources on a failed transaction, and may also be required to pay a termination fee under various circumstances (as more fully described in the section entitled “The Merger Agreement—Transaction Expenses and Termination Fees”); and

 

    various other risks associated with the Merger and the business of Marvell and the combined company described in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” respectively.

The reasons set forth above are not intended to be exhaustive, but include the material factors considered by the Marvell board of directors in approving the Merger Agreement, the Marvell Share Issuance and the other transactions contemplated by the Merger Agreement. In view of the wide variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, the Marvell board of directors did not find it useful to and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the Merger Agreement, the Marvell Share Issuance and the other transactions contemplated by the Merger Agreement and to make its recommendation to Marvell shareholders. In addition, individual members of the Marvell board of directors may have given different weights to different factors. The Marvell board of directors carefully considered all of the factors described above as a whole.

Cavium’s Reasons for the Merger and Recommendation of Cavium’s Board of Directors

The Cavium board of directors has determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Cavium and its shareholders. Accordingly, by a vote at a meeting held on November 19, 2017, the Cavium board of directors unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger.

The Cavium board of directors unanimously recommends that Cavium shareholders vote “FOR” each of the Merger Proposal, the Cavium Adjournment Proposal and the Cavium Non-Binding Compensation Proposal at the Cavium special meeting.

In evaluating the proposed Merger, the Cavium board of directors consulted with Cavium’s management and Cavium’s legal and financial advisors and, in reaching its determination and recommendation, the Cavium board of directors considered a number of factors. The Cavium board of directors also consulted with Cavium’s legal counsel regarding its obligations, legal due diligence matters and the legal terms of the Merger Agreement and Cavium’s financial advisors regarding the financial terms of the Merger Agreement.

Many of the factors considered favored the conclusion of the Cavium board of directors that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of Cavium and its shareholders, including the following:

 

    the growing challenges faced by the semiconductor industry, including macroeconomic trends and the fact that the industry is highly competitive, cyclical and subject to constant and rapid technological change with short product life-cycles for certain products and wide fluctuations in product supply and demand;

 

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    the opportunity to combine Marvell’s and Cavium’s product portfolios to create the scale and breadth to deliver comprehensive end-to-end solutions for customers across the cloud data center, enterprise and service provider markets, and to expand the combined companies’ serviceable addressable market to more than $16 billion;

 

    the opportunity to combine resources, including consolidating and reducing areas of overlap in operating and other expenses, such as the expenses of maintaining two separate public companies;

 

    the opportunity to combine expertise, including the skills of experienced managers in the semiconductor industry, to better meet the needs of the customers of both Cavium and Marvell;

 

    the products and development capabilities of Cavium and Marvell are complementary, and should enable the combined company to offer broader product value to customers of both companies;

 

    the opportunity for the combined company to become an R&D innovation engine to accelerate product development, positioning the combined company to meet today’s massive and growing demand for solutions encompassing data storage, heterogeneous computing and high-speed connectivity;

 

    the financial strength of the combined company and its ability to fund required investments to remain a leader in the semiconductor industry;

 

    the fact that the share component of the Merger Consideration offers Cavium shareholders an opportunity to participate in the potential for earnings per share accretion and potential synergies created by the Merger;

 

    the fact that the consideration proposed by Marvell reflected extensive negotiations between the parties and their respective advisors, and the Cavium board of directors’ belief that the agreed Merger Consideration represented the best proposal and economic value available to Cavium shareholders, based upon an overall assessment of the net present value of the risk-adjusted returns that are likely to accrue to shareholders over the long term;

 

    the historical share prices of Cavium and Marvell, including the fact that the implied value of the Merger Consideration of $84.14 per share (based on the price per Marvell common share of $20.29 on November 17, 2017, the last trading day prior to the approval by Cavium’s board of directors of the Merger Agreement) represents a premium of approximately 27% based on the unaffected closing price per share of Cavium common stock of $66.01 on November 2, 2017 (before the November 3, 2017 press reports regarding a possible strategic transaction between Cavium and Marvell) and the closing price per Marvell common share of $20.29 on November 17, 2017;

 

    the expectation that the Merger will result in greater long-term shareholder value than the potential for earnings per share accretion that might result from other alternatives available to Cavium, including seeking an alternative transaction with another third party or remaining an independent public company, in each case, considering the potential for Cavium shareholders to share in any future earnings growth of Cavium’s businesses, and the continued expenses of operating a public company and the overall assessment of the net present value of the risk-adjusted returns that are likely to accrue to shareholders over the long term;

 

    the Cavium board of directors’ familiarity with, and understanding of, Cavium’s business, assets, financial condition, results of operations, current business strategy, prospects and the risks facing the semiconductor industry and Cavium;

 

    information and discussions with Cavium’s management and advisors regarding Marvell’s business, assets, financial condition, results of operations, current business strategy and prospects, including the projected long-term financial results of Marvell as a standalone company, the size and scale of the combined company and the expected pro forma effect of the proposed Merger on the combined company;

 

   

the oral opinion of Qatalyst Partners delivered to the Cavium board of directors on November 19, 2017, which was confirmed by delivery of a written opinion from Qatalyst Partners dated November 19,

 

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2017, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Qatalyst Partners as set forth in its written opinion, the Merger Consideration to be received pursuant to, and in accordance with, the Merger Agreement by the holders of shares of Cavium common stock (other than Marvell or any of its affiliates) was fair, from a financial point of view, to such holders, as more fully described in the section entitled “The Merger—Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan. The full text of Qatalyst Partners’ written opinion, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Qatalyst Partners in rendering its opinion, is attached as Annex C to this joint proxy statement/prospectus, and Cavium shareholders are urged to read this written opinion in its entirety;

 

    the oral opinion of J.P. Morgan delivered to the Cavium board of directors on November 19, 2017, which was confirmed by delivery of a written opinion from J.P. Morgan dated November 19, 2017, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the consideration to be paid to Cavium’s shareholders in the proposed Merger was fair, from a financial point of view, to such holders, as more fully described in the section entitled “The Merger—Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan.” The full text of J.P. Morgan’s written opinion, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by J.P. Morgan in rendering its opinion, is attached as Annex D to this joint proxy statement/prospectus, and Cavium shareholders are urged to read this written opinion in its entirety;

 

    the fact that Cavium conducted a thorough process to explore Cavium’s strategic alternatives during which representatives of Cavium sought offers from various potential buyers, none of which made an offer or even expressed an interest to engage in substantive discussions concerning a transaction with Cavium;

 

    the commitment that Mr. Ali, Cavium’s Co-Founder, Chief Executive Officer and Chairman of the board of directors, as well as two other members of Cavium’s board of directors who will be designated by Marvell, will become members of the Marvell board of directors as of the Effective Time, which will provide additional semiconductor industry expertise to the Marvell board of directors and guidance on the integration of Cavium and Marvell;

 

    the nature of the conditions to completion of the Merger included in the Merger Agreement, as well as the likelihood of satisfaction of all of the conditions to the completion of the proposed Merger;

 

    the obligation of the parties to use reasonable best efforts to obtain approvals or clearances from CFIUS and applicable antitrust and competition authorities, including by furnishing certain information and agreeing to certain divestitures, hold separates and other conduct remedies (provided that Marvell will not be required to, among other things, take any actions which would reasonably be expected to result in a significant impact on the strategic or financial benefits of the Merger to Marvell or agree to divest Cavium’s or Marvell’s Ethernet switch or processor businesses), and Marvell’s obligation to pay a termination fee to Cavium in the event that the Merger Agreement is terminated based on the failure to receive any required regulatory clearance by CFIUS and/or MOFCOM (as more fully described in the section entitled “The Merger Agreement—Transaction Expenses and Termination Fees”);

 

    the delivery by Marvell of a debt commitment letter setting forth the financing commitments and other arrangements regarding the financing available to Marvell to complete the proposed Merger;

 

    the fact that Marvell’s obligations pursuant to the Merger Agreement are not subject to any financing condition or similar contingency based on Marvell’s ability to obtain financing, and that Cavium would be entitled to specifically enforce the Merger Agreement, including the obligations of Marvell to complete the Merger, regardless of the availability or terms of Marvell’s financing;

 

   

Cavium’s right to engage in negotiations with, and provide information to, a third party that makes an unsolicited proposal that is received prior to the approval of the Merger Proposal by Cavium

 

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shareholders and relates to an alternative transaction, if the Cavium board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Cavium’s outside legal counsel, that (a) such proposal is, or could reasonably be expected to lead to, a superior offer and (b) failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation”);

 

    the right of the Cavium board of directors to change its recommendation regarding the approval of the Merger Agreement, including to recommend a superior offer, if the Cavium board of directors has determined in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Cavium’s outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (including in connection with a termination of the Merger Agreement by Marvell as a result of such change of recommendation by the Cavium board of directors, the payment by Cavium to Marvell of a $180 million termination fee) (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation”);

 

    the fact that the Starboard Shareholders have signed a voting agreement obligating the Starboard Shareholders to vote all Marvell common shares owned by the Starboard Shareholders in favor of the approval of the Marvell Share Issuance until termination of the voting agreement, which occurs automatically upon the earliest of certain conditions, including termination of the Merger Agreement, the effective date of the Merger, Cavium’s board of directors changing its recommendation regarding the adoption of the Merger Agreement, Marvell’s board of directors changing its recommendation regarding the approval of the Marvell Share Issuance or a Cavium Triggering Event (as more fully described in the section entitled “The Merger—Voting Agreements”);

 

    the fact that Mr. Ali has signed a voting agreement obligating Mr. Ali to vote his Cavium shares in favor of the adoption of the Merger Agreement and the approval of the Merger and the other transactions contemplated by the Merger Agreement until termination of the voting agreement, which occurs automatically upon the earliest of certain conditions, including termination of the Merger Agreement, the effective date of the Merger, Cavium’s board of directors changing its recommendation regarding the adoption of the Merger Agreement, Marvell’s board of directors changing its recommendation regarding the approval of the Marvell Share Issuance or a Marvell Triggering Event (as more fully described in the section entitled “The Merger—Voting Agreements”);

 

    the right of Cavium and Marvell to specific performance to prevent breaches and to enforce the Merger Agreement (as more fully described in the section entitled “The Merger Agreement—Specific Performance; Remedies”);

 

    the availability of appraisal rights under Delaware law for the Cavium shareholders who oppose adoption of the Merger Agreement;

 

    the customary nature of the other representations, warranties and covenants of Cavium in the Merger Agreement; and

 

    the requirement that Cavium or Marvell pay a termination fee to the other party under certain circumstances specified in the Merger Agreement (as more fully described in the section entitled “The Merger Agreement—Transaction Expenses and Termination Fees”).

In the course of its deliberations, the Cavium board of directors also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

 

   

the possibility that the Merger may not be completed or that completion may be unduly delayed for reasons beyond the control of Cavium and/or Marvell, including the potential length of the regulatory

 

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review process and the risk that CFIUS and/or applicable antitrust and competition authorities may prohibit or enjoin the proposed Merger or otherwise impose conditions on Cavium and/or Marvell to obtain clearance for the Merger;

 

    the fact that the Exchange Ratio is fixed, indicating that Cavium shareholders could be adversely affected by a decrease in the trading price of Marvell common shares during the pendency of the proposed Merger and the fact that the Merger Agreement does not provide Cavium with a price-based termination right or other similar protection in favor of Cavium or its shareholders;

 

    the potential for diversion of management and employee attention and for increased employee attrition during the period prior to completion of the proposed Merger, and the potential effect of the proposed Merger on Cavium’s business and relations with customers, suppliers and strategic partners;

 

    the restrictions on the conduct of Cavium’s business prior to completion of the proposed Merger, requiring Cavium to conduct its business and operations in the ordinary course in all material respects and substantially in accordance with past practice, subject to specific limitations, which could delay or prevent Cavium from undertaking business opportunities that may arise pending completion of the Merger and could negatively impact Cavium’s ability to attract and retain employees and decisions of customers, suppliers and strategic partners;

 

    the difficulty inherent in integrating the businesses, assets and workforces of two large companies and the risk that anticipated strategic and other benefits to Cavium and Marvell following completion of the proposed Merger, including any expected synergies, will not be realized or will take longer to realize than expected;

 

    the transaction costs and retention costs to be incurred in connection with the proposed Merger, regardless of whether the proposed Merger is completed;

 

    the fact that the Merger Agreement includes restrictions on the ability of Cavium to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to certain exceptions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Cavium; No Change in Cavium Board Recommendation”);

 

    Marvell’s right to engage in negotiations with, and provide information to, a third party that makes an unsolicited proposal that is received prior to the approval of the Marvell Share Issuance by Marvell shareholders and relates to an alternative transaction if the Marvell board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Marvell’s outside legal counsel, that (a) such proposal is, or could reasonably be expected to lead to, a superior offer and (b) failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation”);

 

    the right of the Marvell board of directors to change its recommendation regarding the approval of the Marvell Share Issuance, including to recommend a superior offer, if the Marvell board of directors has determined in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and Marvell’s outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with its directors’ fiduciary obligations, subject to certain conditions (as more fully described in the section entitled “The Merger Agreement—No Solicitation or Discussions by Marvell; No Change in Marvell Board Recommendation”);

 

    the risk that if Marvell shareholders fail to approve the Marvell Share Issuance, then Marvell may terminate the Merger Agreement;

 

    the fact that if the Merger is not completed, Cavium will have expended significant human and financial resources on a failed transaction, and may also be required to pay a termination fee under various circumstances (as more fully described in the section entitled “The Merger Agreement—Transaction Expenses and Termination Fees”); and

 

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    various other risks associated with the Merger and the business of Cavium and the combined company described in the sections entitled Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” respectively.

The Cavium board of directors considered all of these factors as a whole, and, on balance, concluded that they supported a determination to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. The foregoing discussion of the information and factors considered by the Cavium board of directors is not exhaustive. In view of the wide variety of factors considered by the Cavium board of directors in connection with its evaluation of the proposed Merger and the complexity of these matters, the Cavium board of directors did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. The Cavium board of directors evaluated the factors described above, among others, and concluded that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, were advisable, fair to and in the best interests of Cavium and its shareholders. In considering the factors described above and any other factors, individual members of the Cavium board of directors may have viewed factors differently or given different weight or merit to different factors.

In considering the recommendation of the Cavium board of directors to approve the Merger Proposal, Cavium shareholders should be aware that Cavium’s executive officers and directors may have interests in the Merger that are different from, or in addition to, those of Cavium shareholders generally. The Cavium board of directors was aware of these interests during its deliberations on the merits of the Merger and in deciding to recommend that Cavium shareholders vote “FOR” the Merger Proposal. See the section entitled “—Interests of Cavium Directors and Executive Officers in the Merger” for more information.

Opinion of Marvell’s Financial Advisor, Goldman Sachs

Goldman Sachs rendered its opinion to Marvell’s board of directors that, as of the date of the written fairness opinion and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock, pursuant to the Merger Agreement, was fair to Marvell from a financial point of view.

The full text of the written opinion of Goldman Sachs, dated November 19, 2017, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided advisory services and its opinion for the information and assistance of Marvell’s board of directors in connection with its consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of Marvell common shares should vote on the proposed transaction or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

    the Merger Agreement;

 

    annual reports to shareholders and Annual Reports on Form 10-K of Marvell and Cavium for the five fiscal years ended January 28, 2017 and December 31, 2016, respectively;

 

    certain interim reports to shareholders and Quarterly Reports on Form 10-Q of Marvell and Cavium;

 

    certain other communications from Marvell and Cavium to their respective shareholders;

 

    certain publicly available research analyst reports for Marvell and Cavium;

 

    certain internal financial analyses and forecasts for Cavium prepared by its management and summarized in the section titled “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Financial Information”; and

 

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    certain internal financial analyses and forecasts for Marvell stand-alone and pro forma for the transaction and certain financial analyses and forecasts for Cavium, in each case, as prepared by the management of Marvell and approved for Goldman Sachs’ use by Marvell (referred to in this section as the “Forecasts”), and certain operating synergies projected by the management of Marvell to result from the transaction, as approved for Goldman Sachs’ use by Marvell (referred to in this section as the “Synergies”) and summarized in the section entitled “The Merger—Unaudited Prospective Financial Information—Marvell Unaudited Financial Information.”

Goldman Sachs also held discussions with members of the senior managements of Marvell and Cavium regarding their assessment of the past and current business operations, financial condition and future prospects of Cavium and with the members of senior management of Marvell regarding their assessment of the past and current business operations, financial condition and future prospects of Marvell and the strategic rationale for, and the potential benefits of, the proposed transaction; reviewed the reported price and trading activity for the Marvell common shares and the shares of Cavium common stock; compared certain financial and stock market information for Marvell and Cavium with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the semiconductor industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with Marvell’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with Marvell’s consent that the Forecasts and the Synergies were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Marvell. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of Marvell or Cavium or any of their respective subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for completion of the proposed transaction will be obtained without any adverse effect on Marvell or Cavium or on the expected benefits of the transaction in any way meaningful to its analysis. Goldman Sachs has also assumed that the transaction will be completed on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion does not address the underlying business decision of Marvell to engage in the transaction or the relative merits of the transaction as compared to any strategic alternatives that may be available to Marvell; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness from a financial point of view, as of the date of the opinion, of the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock, pursuant to the Merger Agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the Merger Agreement or the transaction or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the transaction, including the fairness of the transaction to, or any consideration received in connection therewith by, the holders of any class of securities, creditors, or other constituencies of Marvell; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Marvell or Cavium, or any class of such persons in connection with the transaction, whether relative to the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock pursuant to the Merger Agreement or otherwise. Goldman Sachs’ opinion was necessarily based on economic, monetary market and other conditions as in effect on, and the information made available to it as of, the date of its opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. In addition, Goldman Sachs does not express any opinion as to the prices at which the Marvell common shares will trade at any time or as to the impact of the transaction on the

 

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solvency or viability of Marvell or Cavium or the ability of Marvell or Cavium to pay their respective obligations when they come due. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to Marvell’s board of directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent the relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before November 16, 2017 and is not necessarily indicative of current market conditions.

Historical Stock Trading Analysis. Goldman Sachs first calculated $79.77 as the implied value of the per share Merger Consideration, determined by adding $40.00, the cash portion of the per share Merger Consideration, to $39.77, the implied value of the equity portion of the per share Merger Consideration calculated by multiplying the undisturbed price per Marvell common share on November 2, 2017, the last day of trading prior to rumors of a transaction surfacing, of $18.28 by the exchange ratio of 2.1757.

Goldman Sachs then reviewed the historical trading prices and volumes for the shares of Cavium common stock for the five-year period ended November 16, 2017. In addition, Goldman Sachs analyzed the implied value of the per share Merger Consideration to be paid to holders of Cavium common stock pursuant to the Merger Agreement in relation to certain per share prices of Cavium common stock on certain dates and for certain periods. This analysis indicated that the implied value of the per share Merger Consideration represented:

 

    a premium of 4.6% based on the closing price of $76.30 per share of Cavium common stock on November 16, 2017;

 

    a premium of 20.8% based on the closing price of $66.01 per share of Cavium common stock on November 2, 2017;

 

    a premium of 16.6% based on the volume-weighted average price of $68.44 per share of Cavium common stock for the one-month period ended on November 2, 2017; and

 

    a premium of 23.9% based on the volume-weighted average price of $64.38 per share of Cavium common stock for the three-month period ended on November 2, 2017.

Goldman Sachs also noted that the 52-week high closing price per share of Cavium common stock for the period ended on November 2, 2017 was $75.48 and the 52-week low closing price per share of Cavium common stock for the period ended on November 2, 2017 was of $52.31.

Selected Companies Analysis. Goldman Sachs reviewed and compared certain financial information, ratios and multiples for Cavium to corresponding information for the following publicly traded companies in the semiconductor industry, the operations of which Goldman Sachs deemed similar for purposes of this analysis, based on its professional judgment and experience, to certain operations of Cavium (collectively referred to in this section as the “Cavium Selected Companies”):

 

    Advanced Micro Devices, Inc.

 

    Broadcom Limited

 

    Intel Corporation

 

    Mellanox Technologies, Ltd.

 

    Microsemi Corporation

 

    Xilinx, Inc.

 

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Goldman Sachs also reviewed and compared certain financial information for Marvell to corresponding financial information, ratios and public market multiples for the following publicly traded companies in the semiconductor industry, the operations of which Goldman Sachs deemed similar for purposes of this analysis, based on its professional judgment and experience, to certain operations of Marvell (collectively referred to in this section as the “Marvell Selected Companies”):

 

    Broadcom Limited

 

    Mellanox Technologies, Ltd.

 

    Microsemi Corporation

 

    Quantenna Communications, Inc.

 

    Realtek Semiconductor Corp.

 

    Silicon Motion Technology Corporation

In addition, Goldman Sachs also reviewed and compared certain financial information for Cavium and Marvell to corresponding financial information, ratios and public market multiples for the companies represented in the PHLX Semiconductor Sector index (the “SOX Companies”).

Although none of the Cavium Selected Companies is directly comparable to Cavium, none of the Marvell Selected Companies is directly comparable to Marvell, and none of the SOX Companies is directly comparable to either Cavium or Marvell, in each case such companies were chosen because they are publicly traded companies with operations that, for the purposes of analysis, may be considered similar to certain of Marvell’s or Cavium’s results, market size and product profile.

In addition, for each of the Cavium Selected Companies, the Marvell Selected Companies and the SOX Companies, Goldman Sachs calculated and compared various financial multiples and ratios using (i) the closing price per share as of November 2, 2017 and November 16, 2017 and (ii) the closing prices per share for the three-month, six-month, one-year, two-year and three-year periods ended on November 2, 2017 and November 16, 2017, respectively. Goldman Sachs also calculated for Cavium and Marvell various financial multiples and ratios using (i) the closing price per share as of November 2, 2017 and (ii) the closing price per share as of each date in the three-month, six-month, one-year, two-year and three-year periods ended on November 2, 2017. With respect to each of the Cavium Selected Companies, the Marvell Selected Companies, the SOX Companies, Cavium and Marvell, Goldman Sachs calculated:

 

    such company’s price per share as a multiple of its estimated next twelve months’ non-GAAP earnings per share based on the Institutional Brokers’ Estimates System’s (“IBES”) consensus estimates (referred to in this section as the “NTM P/E Ratio”); and

 

    such company’s estimated enterprise value, which is (x) the value of such company’s common equity based on closing prices multiplied by the number of outstanding shares of such company plus (y) the net debt of such company, in each case based on data obtained from S&P Capital IQ, as a multiple of its estimated next twelve months’ earnings before interest, taxes, depreciation and amortization (referred to in this section as “EBITDA”) excluding stock based compensation expense based on the IBES consensus estimates (referred to in this section as the “NTM EV/EBITDA Multiple”).

 

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The results of these analyses are summarized as follows:

 

NTM P/E Ratio

 
           For the Period Ended on November 2, 2017  
    November 2,
2017
     3 Months
Average
     6 Months
Average
     1 Year
Average
     2 Years
Average
     3 Years
Average
 

Cavium

    18.8x        19.3x        20.5x        21.9x        25.5x        28.0x  

Marvell

    14.9x        14.6x        14.8x        15.8x        18.0x        17.0x  

Cavium Selected Companies

    15.9x        15.8x        15.7x        14.9x        14.0x        14.4x  

Marvell Selected Companies

    15.7x        14.8x        14.8x        14.3x        13.7x        13.6x  

SOX Companies (exc. Nvidia Corporation) (1)

    16.1x        15.6x        15.6x        15.8x        15.4x        15.6x  
           For the Period Ended on November 16, 2017  
    November 16,
2017
     3 Months
Average
     6 Months
Average
     1 Year
Average
     2 Years
Average
     3 Years
Average
 

Cavium Selected Companies

    17.3x        16.0x        15.8x        15.1x        14.1x        14.4x  

Marvell Selected Companies

    15.3x        14.8x        14.9x        14.4x        13.8x        13.7x  

SOX Companies (exc. Nvidia Corporation) (1)

    16.3x        15.8x        15.6x        15.9x        15.5x        15.6x  

NTM EV/EBITDA Multiple

 
           For the Period Ended on November 2, 2017  
    November 2,
2017
     3 Months
Average
     6 Months
Average
     1 Year
Average
     2 Years
Average
     3 Years
Average
 

Cavium

    12.0x        13.3x        14.1x        15.1x        17.0x        18.9x  

Marvell

    10.5x        10.1x        10.1x        10.2x        9.6x        8.9x  

Cavium Selected Companies

    11.9x        11.5x        11.7x        11.9x        11.0x        10.7x  

Marvell Selected Companies

    10.5x        10.2x        10.1x        10.1x        9.5x        9.5x  

SOX Companies (exc. Nvidia Corporation) (1)

    11.5x        10.5x        10.7x        10.7x        9.9x        9.7x  
           For the Period Ended on November 16, 2017  
    November 16,
2017
     3 Months
Average
     6 Months
Average
     1 Year
Average
     2 Years
Average
     3 Years
Average
 

Cavium Selected Companies

    11.8x        11.5x        11.6x        11.9x        11.0x        10.7x  

Marvell Selected Companies

    10.5x        10.3x        10.1x        10.1x        9.5x        9.6x  

SOX Companies (exc. Nvidia Corporation) (1)

    11.7x        10.8x        10.7x        10.8x        10.0x        9.7x  

 

(1) Nvidia Corporation was excluded because, among other reasons, its NTM P/E Ratios and NTM EV/EDITDA Multiples for the periods compared were deemed too high to be meaningful for purposes of analysis.

Financial Analyses of Cavium

Selected Transactions Analysis. Goldman Sachs analyzed certain information relating to the following selected transactions in the semiconductor industry since 2011 with targets with disclosed enterprise values greater than $1 billion (collectively referred to in this section as the “Selected Transactions”):

 

Announcement Date

  

Acquirer

  

Target

January 5, 2011

   Qualcomm Incorporated    Atheros Communications, Inc.

April 4, 2011

   Texas Instruments Incorporated    National Semiconductor Corporation

September 12, 2011

   Broadcom Corporation    NetLogic Microsystems, Inc.

December 16, 2013

   Avago Technologies Limited    LSI Corporation

February 24, 2014

   RF Micro Devices, Inc.    TriQuint Semiconductor, Inc.

June 9, 2014

   Analog Devices, Inc.    Hittite Microwave Corporation

 

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Announcement Date

  

Acquirer

  

Target

August 20, 2014

   Infineon Technologies AG    International Rectifier Corporation

October 15, 2014

   Qualcomm Incorporated    CSR plc

March 2, 2015

   NXP Semiconductors N.V.    Freescale Semiconductors, Ltd.

April 30, 2015

   Hua Capital Management Co., Ltd.    OmniVision Technologies, Inc.

May 28, 2015

   Avago Technologies Limited    Broadcom Corporation

June 1, 2015

   Intel Corporation    Altera Corporation

October 21, 2015

   Western Digital Corporation    SanDisk Corporation

November 18, 2015

   ON Semiconductor Corporation    Fairchild Semiconductor International, Inc.

November 24, 2015

   Microsemi Corporation    PMC-Sierra, Inc.

January 19, 2016

   Microchip Technology Incorporated    Atmel Corporation

June 15, 2016

   Cavium, Inc.    QLogic Corporation

July 26, 2016

   Analog Devices, Inc.    Linear Technology Corporation

September 12, 2016

   Renesas Electronics Corporation    Intersil Corporation

October 27, 2016

   Qualcomm Incorporated    NXP Semiconductors N.V.

November 2, 2016

   Broadcom Limited    Brocade Communications Systems, Inc.

While none of the companies that participated in the Selected Transactions is directly comparable to Marvell or Cavium, the companies that participated in the Selected Transactions are companies with operations that, for the purposes of analysis, may be considered similar to certain of Marvell’s or Cavium’s results, market size and product profile.

For each of the Selected Transactions, Goldman Sachs calculated and compared various financial multiples, financial ratios and other financial information, including:

 

    the estimated transaction enterprise value, which is (x) the announced per share consideration paid or payable in the applicable transaction multiplied by the number of diluted outstanding shares of the target company plus (y) the net debt of the target company, in each case based on data obtained from public filings, as a multiple of the target’s estimated next twelve months’ revenue from the announcement date of the transaction based on IBES consensus estimates (referred to in this section as the “NTM Transaction Revenue Multiple”);

 

    the estimated transaction enterprise value, as a multiple of the target’s estimated next twelve months’ EBITDA excluding stock based compensation expense, from the announcement date of the transaction based on IBES estimates and data obtained from Wall Street research (referred to in this section as the “NTM Transaction EBITDA Multiple”); and

 

    the announced per share consideration paid or payable in the applicable transaction, based on data obtained from public filings, as a multiple of the target’s estimated next twelve months’ earnings per share from the announcement date for the transaction based on IBES estimates and data obtained from Wall Street research (referred to in this section as the “NTM Transaction P/E Ratio”).

 

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The following table presents the results of this analysis:

 

Selected Transactions

 

Acquirer

  

Target

   NTM
Transaction
Revenue
Multiple
     NTM
Transaction
EBITDA
Multiple
     NTM
Transaction
P/E Ratio
 

Qualcomm Incorporated

  

Atheros Communications, Inc.

     3.3x        17.2x        24.3x  

Texas Instruments Incorporated

  

National Semiconductor Corporation

     4.3x        10.2x        18.2x  

Broadcom Corporation

  

NetLogic Microsystems, Inc.

     7.8x        19.3x        29.2x  

Avago Technologies Limited

  

LSI Corporation

     2.4x        11.5x        17.0x  

RF Micro Devices, Inc.

  

TriQuint Semiconductor, Inc.

     1.7x        8.4x        21.6x  

Analog Devices, Inc.

  

Hittite Microwave Corporation

     6.7x        14.6x        29.5x  

Infineon Technologies AG

  

International Rectifier Corporation

     1.8x        8.4x        22.8x  

Qualcomm Incorporated

  

CSR plc

     2.8x        14.9x        26.5x  

NXP Semiconductors N.V.

  

Freescale Semiconductors, Ltd.

     3.4x        13.9x        18.3x  

Hua Capital Management Co., Ltd.

  

OmniVision Technologies, Inc.

     0.8x        9.0x        18.1x  

Avago Technologies Limited

  

Broadcom Corporation

     3.6x        12.6x        15.0x  

Intel Corporation

  

Altera Corporation

     7.6x        22.3x        31.7x  

Western Digital Corporation

  

SanDisk Corporation

     2.9x        9.9x        21.6x  

ON Semiconductor Corporation

  

Fairchild Semiconductor International, Inc.

     1.7x        8.2x        16.4x  

Microsemi Corporation

  

PMC-Sierra, Inc.

     4.2x        12.5x        19.0x  

Microchip Technology Incorporated

  

Atmel Corporation

     2.8x        14.9x        35.3x  

Cavium, Inc.

  

QLogic Corporation

     2.1x        6.7x        14.8x  

Analog Devices, Inc.

  

Linear Technology Corporation

     8.9x        16.5x        25.3x  

Renesas Electronics Corporation

  

Intersil Corporation

     5.4x        25.1x        30.8x  

Qualcomm Incorporated

  

NXP Semiconductors N.V.

     4.9x        14.0x        16.7x  

Broadcom Limited

  

Brocade Communications Systems, Inc.

     2.3x        8.9x        13.4x  

Median

     3.3x        12.6x        21.6x  

High

     8.9x        25.1x        35.3x  

Low

     0.8x        6.7x        13.4x  

Proposed Transaction

     5.8x        15.2x        22.7x  

Goldman Sachs then applied an illustrative range of NTM Transaction P/E Ratios of 20.0x to 30.0x to Cavium’s non-GAAP earnings per share, as provided in the Forecasts, to derive a range of implied equity values of $68 to $102 per share of Cavium common stock when rounded to the nearest dollar.

 

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Premia Analysis. Goldman Sachs also calculated for each of the Selected Transactions the implied premia represented by the announced per share consideration paid or payable in the applicable transaction, based on data obtained from public filings, relative to the last undisturbed closing share price for the target company prior to the announcement of the applicable transaction (referred to in this section as the “Implied Premium”). The following table presents the results of this analysis:

 

Selected Transactions

 

Acquirer

  

Target

   Implied
Premium
 
Qualcomm Incorporated    Atheros Communications, Inc.      21.6
Texas Instruments Incorporated    National Semiconductor Corporation      77.7
Broadcom Corporation    NetLogic Microsystems, Inc.      56.7
Avago Technologies Limited    LSI Corporation      41.0
RF Micro Devices, Inc.    TriQuint Semiconductor, Inc.      15.4
Analog Devices, Inc.    Hittite Microwave Corporation      28.8
Infineon Technologies AG    International Rectifier Corporation      50.6
Qualcomm Incorporated    CSR plc      56.5
NXP Semiconductors N.V.    Freescale Semiconductors, Ltd.      4.2
Hua Capital Management Co., Ltd.    OmniVision Technologies, Inc.      20.9
Avago Technologies Limited    Broadcom Corporation      19.0
Intel Corporation    Altera Corporation      56.2
Western Digital Corporation    SanDisk Corporation      76.2
ON Semiconductor Corporation    Fairchild Semiconductor International, Inc.      41.4
Microsemi Corporation    PMC-Sierra, Inc.      78.0
Microchip Technology Incorporated    Atmel Corporation      23.7
Cavium, Inc.    QLogic Corporation      21.4
Analog Devices, Inc.    Linear Technology Corporation      23.9
Renesas Electronics Corporation    Intersil Corporation      43.9
Qualcomm Incorporated    NXP Semiconductors N.V.      33.8
Broadcom Limited    Brocade Communications Systems, Inc.      46.7

Median

     41

High

     78.0

Low

     4.2

Proposed Transaction

     20.8

 

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In addition, using data obtained from Thomson Reuters, Goldman Sachs also analyzed the premia paid in transactions involving the acquisition of control of U.S. targets with disclosed enterprise values greater than $1 billion for the period from January 1, 2012 through November 16, 2017 and for the subset of such transactions with a target in the technology, media and telecom sector, in each case in relation to the closing prices per share of the common stock of the target involved in such transaction on the day prior to the announcement of such transaction. The following table presents the results of this analysis:

 

Acquisition Premia

U.S. Targets with Enterprise Values over $1 Billion

January 1, 2012 through November 16, 2017

 

 

 

Median of 25th Percentile of Premia

     14

Median of 75th Percentile of Premia

     33

Median Premium

     26

 

Acquisition Premia
U.S. Targets with Enterprise Values over $1 Billion

Technology, Media and Telecom Sector Only
January 1, 2012 through November 16, 2017

 

 

Median of 25th Percentile of Premia

     12

Median of 75th Percentile of Premia

     41

Median Premium

     26

Goldman Sachs then applied an illustrative range of premia of 20% to 50% to the closing price of $66.01 per share of Cavium common stock on November 2, 2017, to derive a range of implied per share equity values of $79 to $99 when rounded to the nearest dollar.

Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on Cavium. Using discount rates ranging from 10.0% to 14.0%, reflecting estimates of Cavium’s weighted average cost of capital, Goldman Sachs discounted to present value as of September 30, 2017 (i) estimates of unlevered free cash flow for Cavium for the fourth quarter of 2017, and then annually through 2026 as reflected in the Forecasts and (ii) a range of illustrative terminal values for Cavium, which were calculated by applying perpetuity growth rates ranging from 4.0% to 6.0%, to a terminal year estimate of the free cash flow to be generated by Cavium, as reflected in the Forecasts (which analysis implied exit terminal year next twelve months’ EBITDA multiples, excluding stock based compensation, ranging from 6.8x to 16.6x). Goldman Sachs derived such discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative enterprise values for Cavium by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for Cavium the net debt of Cavium as of September 30, 2017, as publicly reported and provided by the management of Marvell, to derive a range of illustrative equity values for Cavium. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Cavium, as provided by the management of Marvell, to derive a range of illustrative present values per share ranging from $46.62 to $119.05.

 

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Financial Analyses of Marvell (Stand-Alone and Pro Forma for the Transaction)

Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis for Marvell on a stand-alone basis. Using discount rates ranging from 9.5% to 11.5%, reflecting estimates of Marvell’s weighted average cost of capital, Goldman Sachs discounted to present value as of July 29, 2017 (i) estimates of unlevered free cash flow for Marvell for the second half of fiscal year 2018, and then annually through fiscal year 2023 as reflected in the Forecasts and (ii) a range of illustrative terminal values for Marvell, which were calculated by applying perpetuity growth rates ranging from 2.0% to 4.0%, to a terminal year estimate of the free cash flow to be generated by Marvell, as reflected in the Forecasts (which analysis implied exit terminal year next twelve months’ EBITDA multiples, excluding stock based compensation, ranging from 8.7x to 14.7x). Goldman Sachs derived such discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative enterprise values for Marvell by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for Marvell the net debt of Marvell as of July 29, 2017, as publicly reported and provided by the management of Marvell, to derive a range of illustrative equity values for Marvell. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding Marvell common shares, as provided by the management of Marvell, to derive a range of illustrative present values per share ranging from $18.84 to $28.11.

Using the Forecasts and the Synergies, Goldman Sachs also performed an illustrative discounted cash flow analysis for Marvell pro forma for the transaction (after giving effect to the Synergies). Using discount rates ranging from 10.0% to 12.0%, reflecting estimates of Marvell’s pro forma weighted average cost of capital, Goldman Sachs discounted to present value as of July 29, 2017 (i) estimates of pro forma unlevered free cash flow for Marvell for the second half of fiscal year 2018, and then annually through fiscal year 2023, as reflected in the Forecasts, inclusive of the Synergies, and (ii) a range of illustrative pro forma terminal values for Marvell, which were calculated by applying perpetuity growth rates ranging from 3.5% to 5.5%, to a terminal year estimate of the pro forma free cash flow to be generated by Marvell as reflected in the Forecasts, inclusive of the Synergies that were grown at perpetuity growth rates ranging from 2.5% to 4.5% (which analysis implied exit terminal year next twelve months’ EBITDA multiples, excluding stock based compensation, ranging from 9.5x to 17.4x). Goldman Sachs derived such discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company pro forma for the transaction, as well as certain financial metrics for the United States financial markets generally. The ranges of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative pro forma enterprise values for Marvell by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative pro forma enterprise values it derived for Marvell the pro forma net debt of Marvell, as provided by the management of Marvell, to derive a range of pro forma illustrative equity values for Marvell. Goldman Sachs then divided the range of illustrative equity values it derived by the pro forma number of fully diluted outstanding Marvell common shares, as provided by the management of Marvell, to derive a range of illustrative present values per Marvell common share pro forma for the transaction. This analysis indicated that the range of illustrative present values per Marvell common share pro forma for the transaction ranged from $18.53 to $34.36.

Illustrative Present Value of Future Share Price Analysis. Goldman Sachs performed an illustrative analysis of the implied present value of the future value per Marvell common share, which is designed to provide an

 

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indication of the present value of a theoretical future value of a company’s equity as a function of such company’s estimated future earnings and its assumed price to future earnings per share multiple. Goldman Sachs first calculated the implied values per Marvell common share as of the fiscal years ending February 3, 2018, February 2, 2019, February 1, 2020, January 30, 2021 and January 29, 2022, by applying a range of next twelve months’ price-to-earnings per share multiples of 14.0x to 16.0x to the estimated earnings per Marvell common share for the fiscal years ended February 2, 2019, February 1, 2020, January 30, 2021, January 29, 2022 and January 28, 2023 contained in the Forecasts. These illustrative multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account undisturbed and historical trading data and next twelve months’ price-to-earnings per share multiples for Marvell and current and historical trading data and next twelve months’ price-to-earnings per share multiples for the Marvell Selected Companies and the SOX Companies. Goldman Sachs then discounted the implied values per Marvell common share back to implied present values as of July 29, 2017, using an illustrative discount rate of 10.2%, reflecting an estimate of Marvell’s cost of equity. Goldman Sachs then used the same illustrative discount rate to discount back to implied present values as of July 29, 2017 the estimated cumulative dividends per Marvell common share for the fiscal years ended February 2, 2019, February 1, 2020, January 30, 2021, January 29, 2022 and January 28, 2023 contained in the Forecasts. Goldman Sachs derived such range of discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. Goldman Sachs then added together these theoretical future values per Marvell common share and the present value of the estimated cumulative dividends per Marvell common share. This analysis resulted in a range of implied present values of $18 to $23 per Marvell common share when rounded to the nearest dollar.

Goldman Sachs also performed an illustrative analysis of the implied present value of the future value per Marvell common share pro forma for the transaction. Goldman Sachs first calculated the implied values per Marvell common share pro forma for the transaction as of the fiscal years ended February 3, 2018, February 2, 2019, February 1, 2020, January 30, 2021 and January 29, 2022, by applying a range of next twelve months’ price-to-earnings per share multiples of 15.0x to 17.0x to the estimated pro forma earnings per Marvell common share for the fiscal years ended February 2, 2019, February 1, 2020, January 30, 2021, January 29, 2022 and January 28, 2023 contained in the Forecasts. These illustrative multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account undisturbed and historical trading data and next twelve months’ price-to-earnings per share multiples for Marvell and current and historical trading data and next twelve months’ price-to-earnings per share multiples for the Marvell Selected Companies and the SOX Companies. Goldman Sachs then discounted the implied values per Marvell common share pro forma for the transaction back to implied present values as of July 29, 2017, using an illustrative discount rate of 11.3%, reflecting an estimate of Marvell’s pro forma cost of equity. Goldman Sachs then used the same illustrative discount rate to discount back to implied present values as of July 29, 2017 the estimated pro forma cumulative dividends per Marvell common share for the fiscal years ended February 2, 2019, February 1, 2020, January 30, 2021, January 29, 2022 and January 28, 2023 contained in the Forecasts. Goldman Sachs derived such range of discount rates by application of the capital asset pricing model, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. Goldman Sachs then added together these theoretical future values per Marvell common share pro forma for the transaction and the present value of the estimated cumulative pro forma dividends per Marvell common share pro forma for the transaction. This analysis resulted in a range of implied present values of $20 to $28 per Marvell common share pro forma for the transaction when rounded to the nearest dollar.

General

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its

 

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determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Marvell or Cavium or the contemplated transaction.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs providing its opinion to Marvell’s board of directors that, as of the date of the opinion, the Merger Consideration to be paid by Marvell for each outstanding share of Cavium common stock, pursuant to the Merger Agreement, was fair from a financial point of view to Marvell. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Marvell, Cavium, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The Merger Consideration was determined through arm’s-length negotiations between Marvell and Cavium and was approved by Marvell’s board of directors. Goldman Sachs provided advice to Marvell during these negotiations. Goldman Sachs did not, however, recommend any specific exchange ratio or amount of consideration to Marvell or its board of directors or that any specific exchange ratio or amount of consideration constituted the only appropriate exchange ratio or amount of consideration for the transaction.

As described above, Goldman Sachs’ opinion to Marvell’s board of directors was one of many factors taken into consideration by Marvell’s board of directors in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities in which they invest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Marvell, Cavium, any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transactions contemplated by the Merger Agreement for the accounts of Goldman Sachs and its affiliates and employees and their customers. Goldman Sachs acted as financial advisor to Marvell in connection with, and participated in certain of the negotiations leading to, the transactions contemplated by the Merger Agreement. At the request of Marvell, an affiliate of Goldman Sachs entered into financing commitments and agreements to provide Marvell with a $900 million three-year term loan facility and an $850 million 364-day bridge facility. An affiliate of Goldman Sachs may also act as a lead underwriter, initial purchaser, placement agent, arranger and bookrunner in connection with Marvell’s possible incurrence of permanent debt financing to fund, in part, the cash portion of the Merger Consideration, to refinance certain existing indebtedness of Cavium and to pay related fees and expenses. The actual amount of aggregate fees received and to be received by Goldman Sachs and its affiliates in connection with this debt financing will depend upon, among other things, the timing of reductions of the bridge loan commitments and term loan facility, Marvell’s credit rating and the issuance costs for such debt financing. Marvell estimates that Goldman Sachs and its affiliates will in the aggregate receive approximately $10 million in fees in connection with the bridge loan facility, term loan facility and permanent debt financing. This estimate is based on various assumptions, including that Marvell will incur permanent debt financing in connection with the proposed transaction and will receive an investment grade credit rating from two of S&P, Moody’s and Fitch. Except as disclosed herein with respect to the contemplated transaction and with respect to the debt financing, during the two year period ended November 19, 2017, the Investment Banking Division of Goldman Sachs has not been engaged by Marvell, Cavium or their respective affiliates to provide financial advisory or underwriting services for which Goldman Sachs has received

 

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compensation. Goldman Sachs may also in the future provide financial advisory or underwriting services to Marvell, Cavium and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation, including compensation in connection with providing Marvell with a revolving credit facility, borrowings under which would be used for general corporate purposes.

The Marvell board of directors selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transaction. Pursuant to a letter agreement dated November 11, 2017, Marvell engaged Goldman Sachs to act as its financial advisor in connection with the contemplated transaction. The engagement letter between Marvell and Goldman Sachs provides for a transaction fee of $22,000,000, of which $5,000,000 became payable upon execution of the Merger Agreement, and the remainder of which is contingent upon completion of the Merger. In addition, Marvell has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Opinions of Cavium’s Financial Advisors, Qatalyst Partners and J.P. Morgan

Opinion of Qatalyst Partners

Cavium retained Qatalyst Partners to act as financial advisor to the Cavium board of directors in connection with a potential transaction such as the Merger and to evaluate whether the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Cavium common stock, other than Marvell or any of its affiliates, was fair, from a financial point of view, to such holders. Cavium selected Qatalyst Partners to act as its financial advisor based on Qatalyst Partners’ qualifications, expertise, reputation and knowledge of the business and affairs of Cavium and the industry in which it operates. Qatalyst Partners has provided its written consent to the reproduction of the Qatalyst Partners’ opinion in this joint proxy statement/prospectus. At the meeting of the Cavium board of directors on November 19, 2017, Qatalyst Partners rendered its oral opinion, subsequently confirmed in writing, that, as of such date and based upon and subject to the considerations, limitations and other matters set forth therein, the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Cavium common stock, other than Marvell or any of its affiliates, was fair, from a financial point of view, to such holders. Qatalyst Partners delivered its written opinion, dated November 19, 2017, to the Cavium board of directors following the meeting of the Cavium board of directors.

The full text of Qatalyst Partners’ written opinion, dated November 19, 2017, to the Cavium board of directors is attached as Annex C to this joint proxy statement/prospectus and is incorporated by reference herein. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. You should read the opinion carefully in its entirety. Qatalyst Partners’ opinion was provided to the Cavium board of directors and addresses only, as of the date of the opinion, the fairness, from a financial point of view, of the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Cavium common stock, other than Marvell or any of its affiliates, and it does not address any other aspect of the Merger. Qatalyst Partners’ opinion does not constitute a recommendation as to how any Cavium shareholder should vote with respect to the Merger Proposal or any other matter and does not in any manner address the price at which the shares of Cavium common stock or Marvell common shares will trade at any time. The summary of Qatalyst Partners’ opinion set forth herein is qualified in its entirety by reference to the full text of the opinion.

In arriving at its opinion, Qatalyst Partners reviewed a draft of the Merger Agreement, certain related documents, and certain publicly available financial statements of Cavium and Marvell and other business and financial information of Cavium, and to the extent made available by Cavium, of Marvell. Qatalyst Partners also reviewed (i) certain forward-looking information relating to Cavium prepared by the management of Cavium, including

 

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financial projections and operating data of Cavium, which are described below in the section titled “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information” (referred to in this joint proxy statement/prospectus as the “Cavium Projections”), (ii) certain forward-looking information relating to Marvell prepared by the management of Marvell, including financial projections and operating data of Marvell prepared by the management of Marvell, and adjusted by the management of Cavium, which are described below in the section titled “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information” (referred to in this joint proxy statement/prospectus as the “Adjusted Marvell Projections”), and (iii) information relating to certain strategic, financial and operational benefits anticipated from the Merger prepared by the management of Marvell, and adjusted by the management of Cavium, as described below in the section titled “The Merger—Unaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information” (referred to in this joint proxy statement/prospectus as the “Adjusted Marvell Synergies”). Additionally, Qatalyst Partners discussed the past and current operations and financial condition and the prospects of Cavium and Marvell, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of Cavium and Marvell, respectively. Qatalyst Partners also reviewed the historical market prices and trading activity for shares of Cavium common stock and Marvell common shares and compared the financial performance of Cavium and Marvell and the prices and trading activity of the shares of Cavium common stock and Marvell common shares with that of certain other selected publicly-traded companies and their securities. In addition, Qatalyst Partners reviewed the financial terms, to the extent publicly available, of selected acquisition transactions and performed such other analyses, reviewed such other information and considered such other factors as Qatalyst Partners deemed appropriate.

In arriving at its opinion, Qatalyst Partners assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, Qatalyst Partners by Cavium and Marvell, respectively. With respect to the Cavium Projections, Qatalyst Partners was advised by management of Cavium, and Qatalyst Partners assumed, that such projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Cavium of the future financial performance of Cavium. With respect to the Adjusted Marvell Projections, Qatalyst Partners was advised by the management of Cavium, and Qatalyst Partners assumed, that the Adjusted Marvell Projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Marvell, as adjusted by the management of Cavium, of the future financial performance of Marvell. With respect to the Adjusted Marvell Synergies, Qatalyst Partners was advised by the management of Cavium, and Qatalyst Partners assumed, that the Adjusted Marvell Synergies had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Marvell, and adjusted by the management of Cavium, relating to the strategic, financial and operational benefits anticipated from the Merger. Qatalyst Partners assumed that the Merger will be completed in accordance with the terms set forth in the Merger Agreement, without any modification, waiver or delay. In addition, Qatalyst Partners assumed that, in connection with the receipt of all the necessary approvals of the proposed merger, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on Cavium, Marvell or the contemplated benefits expected to be derived in the proposed merger. Qatalyst Partners did not make any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Cavium or Marvell, nor was Qatalyst Partners furnished with any such evaluation or appraisal. In addition, Qatalyst Partners relied, without independent verification, upon the assessment of the management of Cavium as to (i) the existing and future technology and products of Cavium and Marvell and the risks associated with such technology and products; (ii) the ability to integrate the businesses of Cavium and Marvell; and (iii) the ability to retain key employees of Cavium and Marvell. Qatalyst Partners’ opinion has been approved by Qatalyst Partners’ opinion committee in accordance with its customary practice.

Qatalyst Partners’ opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date of the opinion. Events occurring after the date of the opinion may affect Qatalyst Partners’ opinion and the assumptions used in preparing it, and Qatalyst Partners has not assumed any obligation to update, revise or reaffirm its opinion. Qatalyst Partners’ opinion does not address

 

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the underlying business decision of Cavium to engage in the Merger, or the relative merits of the Merger as compared to any strategic alternatives that may be available to Cavium. Qatalyst Partners’ opinion is limited to the fairness, from a financial point of view, of the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by Cavium shareholders, other than Marvell or any of its affiliates, and Qatalyst Partners expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the officers, directors or employees of Marvell or Cavium, or any class of such persons, relative to such consideration.

The following is a brief summary of the material analyses performed by Qatalyst Partners in connection with its opinion dated November 19, 2017. The analyses and factors described below must be considered as a whole; considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Qatalyst Partners’ opinion. For purposes of its analyses, Qatalyst Partners utilized both the consensus of third-party research analysts’ projections of the future financial performance of Cavium as of November 17, 2017 (referred to in this joint proxy statement/prospectus as the “Analyst Projections”) as well as the Cavium Projections and certain forward-looking information related to Marvell’s financial performance after taking into account the Merger based on the Cavium Projections, the Adjusted Marvell Projections and the Adjusted Marvell Synergies (referred to in this joint proxy statement/prospectus as the “Adjusted Pro Forma Combined Projections”).

Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Qatalyst Partners, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Qatalyst Partners’ financial analyses.

Illustrative Discounted Cash Flow Analysis

Standalone Company

Qatalyst Partners performed an illustrative discounted cash flow analysis, which is designed to imply a potential, present value per share for Cavium common stock as of December 31, 2017 by:

 

    adding:

 

    the implied net present value of the estimated future unlevered free cash flows of Cavium, based on the Cavium Projections, for calendar year 2018 through calendar year 2022 (which implied present value was calculated by using a mid-period discounting convention and a range of discount rates of 9.5% to 13.5%, based on an estimated weighted average cost of capital for Cavium);

 

    the implied net present value of a corresponding terminal value of Cavium, calculated by multiplying Cavium’s estimated net operating profit after tax (referred to in this joint proxy statement/prospectus as “NOPAT”) in calendar year 2023 of approximately $569 million, based on the Cavium Projections, by a range of fully-diluted enterprise value to next-twelve-months NOPAT multiples of 17.0x to 22.0x, and discounted to present value using the same range of discount rates used in the calculation of the implied net present value of the estimated future unlevered free cash flows of Cavium described above; and

 

    the estimated cash balance of Cavium as of December 31, 2017 of approximately $178 million, as provided by Cavium management;

 

    subtracting the estimated debt (including, without limitation, capital lease obligations and certain technology license obligations) of Cavium as of December 31, 2017 of approximately $655 million, as provided by Cavium management;

 

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    applying a dilution factor of approximately 13% to reflect the dilution to Cavium shareholders over the projection period due to the effect of future issuances by Cavium of equity awards, as projected by Cavium’s management; and

 

    dividing the resulting amount (the “Implied Equity Value”) by the number of fully-diluted shares of Cavium common stock outstanding, adjusted for Cavium restricted stock units and Cavium options outstanding (options calculated using the treasury stock method), estimated as of December 31, 2017, as provided by Cavium management on November 14, 2017 (which number of fully diluted shares of Cavium common stock outstanding, based on the applicable Implied Equity Value, ranged from between approximately 83.0 million shares to 83.2 million shares).

Based on the calculations set forth above, this analysis implied a range of values for Cavium common stock of approximately $72.34 to $107.53 per share of Cavium common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Cavium shareholders pursuant to the Merger Agreement was $84.14 per share of Cavium common stock, based on Marvell’s closing stock price on November 17, 2017.

Pro Forma Combined Company

Qatalyst Partners also performed an illustrative pro forma discounted cash flow analysis with respect to Marvell, taking into account the Merger, based on the Adjusted Pro Forma Combined Projections, to calculate indications of the implied pro forma present value of the Marvell common shares constituting the stock portion of the Merger Consideration as of December 31, 2017 and thus, by addition of the cash portion of the Merger Consideration, the per share merger consideration by:

 

    adding:

 

    the implied net present value of the estimated future unlevered free cash flows of Marvell, taking into account the Merger, based on the Adjusted Pro Forma Combined Projections (such estimated future unlevered free cash flows calculated by adding (i) the unlevered free cash flows based on the Cavium Projections, (ii) the unlevered free cash flows based on the Adjusted Marvell Projections, and (iii) the after-tax cost synergies calculated by subtracting the incremental cash taxes associated with the increased profits arising from the cost synergies (applying the pro forma cash tax rate) from the pre-tax cost synergies (based on the Adjusted Marvell Synergies), subtracting one-time costs to achieve the pre-tax cost synergies (as detailed in the Adjusted Marvell Synergies), and then adding the pro forma tax savings (as detailed in the Adjusted Marvell Synergies), for calendar year 2018 through calendar year 2022 (which implied present value was calculated by using a mid-period discounting convention and a range of discount rates of 9.0% to 12.5%, based on an estimated weighted average cost of capital for Marvell, taking into account the Merger); and

 

    the implied net present value of a corresponding terminal value of Marvell, taking into account the Merger, calculated by multiplying Marvell’s estimated NOPAT in calendar year 2023 of approximately $1,523 million, based on the Adjusted Pro Forma Combined Projections, by a range of fully-diluted enterprise value to next-twelve-months NOPAT multiples of 14.0x to 18.0x, and discounted to present value using the same range of discount rates used in the calculation of the implied net present value of the estimated future unlevered free cash flows of Marvell described above;

 

    subtracting the estimated net debt of Marvell as of December 31, 2017 of approximately $1,450 million, taking into account the Merger, as projected by the management of Marvell and the management of Cavium, respectively;

 

    applying a dilution factor of approximately 13% to reflect the dilution to Marvell shareholders, taking into account the Merger, over the projection period due to the effect of future issuances of equity awards, as projected by the management of Cavium;

 

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    dividing the resulting amount (the “Implied Pro Forma Equity Value”) by the number of fully-diluted Marvell common shares, adjusted for Marvell restricted stock units and Marvell options issued (options calculated using the treasury stock method), taking into account the Merger, estimated as of December 31, 2017, as provided by the management of Marvell and the management of Cavium, respectively (which number of fully diluted Marvell common shares, based on the applicable Implied Pro Forma Equity Value, ranged from between approximately 760.3 million shares and 763.8 million shares);

 

    applying the exchange ratio comprising the stock portion of the Merger Consideration of 2.1757 Marvell common shares per share of Cavium common stock; and

 

    adding the per share cash portion of the Merger Consideration of $40.00 per share of Cavium common stock.

Based on the calculations set forth above, this analysis implied a range of values for Cavium common stock of approximately $82.75 to $100.66 per share of Cavium common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Cavium shareholders pursuant to the Merger Agreement was $84.14 per share of Cavium common stock, based on Marvell’s closing share price on November 17, 2017.

Selected Companies Analysis

Qatalyst Partners compared selected financial information and public market multiples for Cavium with publicly available information and public market multiples for selected companies. The companies used in this comparison were those companies listed below, which were selected from publicly traded companies in the semiconductor industry by Qatalyst Partners based on its professional judgment, which included such factors as companies participating in similar lines of businesses to Cavium, having similar financial performance, or having other relevant or similar characteristics. Based upon research analyst consensus estimates for calendar year 2018 as of November 17, 2017, Qatalyst Partners calculated, among other things, the ratio of price to earnings per share for calendar year 2018 (referred to as the “CY2018E P/E Multiple”) for each of the selected companies. The CY2018E P/E Multiples are based on closing prices as of November 17, 2017, except that Broadcom Limited is based on the closing price as of November 2, 2017, the last full trading day before publication of press reports regarding its potential acquisition of QUALCOMM Incorporated.

 

Selected Company

   CY2018E P/E
Multiple
 

Silicon Laboratories Inc. 

     26.1x  

Xilinx, Inc. 

     21.7x  

Inphi Corporation

     19.8x  

Mellanox Technologies, Ltd.

     19.4x  

Integrated Device Technology, Inc.

     18.0x  

Semtech Corporation

     17.4x  

MACOM Technology Solutions Holdings, Inc.

     16.0x  

Broadcom Limited

     14.7x  

MaxLinear, Inc. 

     14.6x  

Intel Corporation

     12.9x  

Microsemi Corporation

     12.1x  

The CY2018E P/E Multiple for Cavium was 19.1x based on the Analyst Projections using Cavium’s closing share price on November 3, 2017, the last full trading day before the publication of press reports regarding a potential sale of Cavium to Marvell.

Based on an analysis of the CY2018E P/E Multiples for the selected companies, Qatalyst Partners selected a representative range of 15.0x to 22.0x and applied this range to Cavium’s estimated calendar year 2018 per share

 

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earnings (excluding stock-based compensation expenses and related payroll taxes, amortization of acquisition related assets, acquisition and integration related cost and tax adjustments, inventory charges and other non-recurring charges) based on each of the Cavium Projections and the Analyst Projections. This analysis implied a range of values for Cavium common stock of approximately $53.63 to $78.65 per share of Cavium common stock based on each of the Cavium Projections and the Analyst Projections. Qatalyst Partners noted that the implied value of the consideration to be received by Cavium shareholders pursuant to the Merger Agreement was $84.14 per share of Cavium common stock, based on Marvell’s closing share price on November 17, 2017.

No company included in the selected companies analysis is identical to Cavium. In evaluating the selected companies, Qatalyst Partners made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond the control of Cavium, such as the impact of competition on the business of Cavium and the industry in general, industry growth and the absence of any material adverse change in the financial condition and prospects of Cavium or the industry or in the financial markets in general. Mathematical analysis, such as determining the arithmetic mean, median, or the high or low, is not in itself a meaningful method of using selected company data.

 

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Selected Transactions Analysis

Qatalyst Partners compared 26 selected transactions involving companies in the semiconductor industry announced between September 2006 and November 2017, including transactions involving companies participating in similar lines of businesses to Cavium, having similar financial performance, or having other relevant or similar characteristics. These transactions are listed below:

 

Announcement
Date

  

Target

  

Acquirer

   Transaction
Multiples (NTM)
 
         EV /
Revenue
    
P/E*
 

12/20/16

   InvenSense, Inc.    TDK Corporation      4.0x        NM ** 

10/27/16

   NXP Semiconductors N.V.***    QUALCOMM Inc.      4.8x        16.6x  

09/12/16

   Intersil Corporation    Renesas Electronics Corporation      5.4x        31.1x  

07/26/16

   Linear Technology Corporation    Analog Devices, Inc.      9.0x        25.3x  

06/15/16

   QLogic Corporation    Cavium, Inc.      2.1x        14.9x  

01/19/16

   Atmel Corporation    Microchip Technology Inc.      2.9x        21.7x  

11/24/15

   PMC-Sierra, Inc.    Microsemi Corporation      4.2x        18.6x  

11/18/15

   Fairchild Semiconductor International, Inc.    ON Semiconductor Corporation      1.7x        20.9x  

10/21/15

   SanDisk Corporation    Western Digital Corporation      3.1x        25.3x  

06/01/15

   Altera Corporation    Intel Corporation      7.7x        35.6x  

05/28/15

   Broadcom Corporation    Avago Technologies Ltd.      3.6x        15.0x  

04/30/15

   OmniVision Technologies, Inc.    Investor Group      1.0x        22.0x  

03/02/15

   Freescale Semiconductor, Ltd.    NXP Semiconductors N.V.      3.4x        16.7x  

12/01/14

   Spansion, Inc.    Cypress Semiconductor Corporation      1.5x        16.8x  

10/14/14

   CSR plc    QUALCOMM Inc.      2.8x        27.1x  

08/20/14

   International Rectifier Corporation    Infineon Technologies AG      2.0x        22.3x  

06/09/14

   Hittite Microwave Corporation    Analog Devices, Inc.      6.5x        28.6x  

02/24/14

   TriQuint Semiconductor, Inc.    RF Micro Devices, Inc.      1.8x        32.4x  

12/16/13

   LSI Corporation    Avago Technologies Ltd.      2.7x        17.1x  

07/12/13

   Spreadtrum Communications, Inc.    Tsinghua Holdings Co. Ltd.      1.5x        10.6x  

06/22/12

   MStar Semiconductor, Inc.    MediaTek Inc.      2.1x        15.9x  

09/12/11

   NetLogic Microsystems, Inc.    Broadcom Corporation      8.3x        29.2x  

04/04/11

   National Semiconductor Corporation    Texas Instruments Inc.      4.4x        18.8x  

01/05/11

   Atheros Communications Inc.    QUALCOMM Inc.      3.4x        23.5x  

12/04/06

   Agere Systems Inc.    LSI Corporation      2.5x        22.6x  

09/15/06

   Freescale Semiconductor Inc.    Investor Group      2.4x        17.7x  

 

* Estimates based on non-GAAP statistics as defined by each company and explicitly excluding stock-based compensation expense regardless of non-GAAP treatment.
** Multiple greater than 100.0x considered not meaningful (“NM”).
*** Revenue estimate for NXP Semiconductors N.V. (“NXP”) is based on Wall Street analyst estimates as of September 28, 2016 including contribution from NXP’s Standard Products business and further adjusted for the impact of the divestiture of NXP’s Standard Products business (based on Wall Street analyst estimates of Standard Products’ business revenue and publicly announced guidance from NXP’s management). Non-GAAP earnings per share estimate for NXP is based on Wall Street analyst estimates as of September 28, 2016 including contribution from NXP’s Standard Products business. Fully-diluted enterprise value for NXP is adjusted for receipt of estimated post-tax proceeds from the sale of the Standard Products business, as publicly reported in NXP’s filings on June 14, 2016.

 

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For each of the transactions listed above, Qatalyst Partners reviewed, among other things, the implied fully-diluted enterprise value of the target company as a multiple of analyst estimates of the next-twelve-months revenue of the target company. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 4.0x to 8.0x applied to Cavium’s estimated next-twelve-months revenue (calculated as the four quarters ending on September 30, 2018 and based on the Analyst Projections). Based on the calculations set forth above, then subtracting net debt of Cavium as of September 30, 2017, and then dividing the resulting amount by the fully-diluted shares of Cavium common stock outstanding as of November 16, 2017, adjusted for Cavium restricted stock units and Cavium options outstanding (options calculated using the treasury stock method), as provided by Cavium’s management on November 17, 2017, this analysis implied a range of values for Cavium common stock of approximately $51.89 to $109.98 per share of Cavium common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Cavium shareholders pursuant to the Merger Agreement was $84.14 per share of Cavium common stock, based on Marvell’s closing share price on November 17, 2017.

For each of the transactions listed above, Qatalyst Partners also reviewed, among other things, the price per share paid for the target company as a multiple of analyst estimates of the next-twelve-months earnings per share (excluding stock-based compensation expense) of the target company. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 20.0x to 30.0x applied to Cavium’s estimated next-twelve-months earnings per share excluding stock-based compensation (calculated as the four quarters ending on September 30, 2018 and based on the Analyst Projections). This analysis implied a range of values for Cavium common stock of approximately $67.19 to $100.78 per share of Cavium common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Cavium shareholders pursuant to the Merger Agreement was $84.14 per share of Cavium common stock, based on Marvell’s closing share price on November 17, 2017.

No company or transaction utilized in the Selected Companies Analysis is identical to Cavium or the Merger. In evaluating the selected transactions, Qatalyst Partners made judgments and assumptions with regard to general business, market and financial conditions and other matters, many of which are beyond the control of Cavium, such as the impact of competition on the business of Cavium or the industry generally, industry growth and the absence of any material adverse change in the financial condition of Cavium or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value of the transactions to which they are being compared. Because of the unique circumstances of each of these transactions and the Merger, Qatalyst Partners cautioned against placing undue reliance on this information.

Miscellaneous

In connection with the review of the Merger by the Cavium board of directors, Qatalyst Partners performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily amenable to a partial analysis or summary description. In arriving at its opinion, Qatalyst Partners considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Qatalyst Partners believes that selecting any portion of its analyses, without considering all analyses as a whole, could create a misleading or incomplete view of the process underlying its analyses and opinion. In addition, Qatalyst Partners may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Qatalyst Partners’ view of the actual value of Cavium. In performing its analyses, Qatalyst Partners made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Cavium. Any estimates contained in Qatalyst Partners’ analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

 

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Qatalyst Partners conducted the analyses described above solely as part of its analysis of the fairness, from a financial point of view, of the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement by Cavium shareholders, other than Marvell or any of its affiliates, and in connection with the delivery of its opinion to the Cavium board of directors. These analyses do not purport to be appraisals or to reflect the price at which Cavium common stock might actually trade.

Qatalyst Partners’ opinion and its presentation to the Cavium board of directors were just some of the many factors considered by the Cavium board of directors in deciding to approve the Merger Agreement. The analyses as described above should not be viewed as determinative of the opinion of the Cavium board of directors with respect to the Merger Consideration to be received by Cavium shareholders pursuant to the Merger or of whether the Cavium board of directors would have been willing to agree to different consideration. The Merger Consideration was determined through arm’s-length negotiations between Cavium and Marvell and was approved by the Cavium board of directors. Qatalyst Partners provided advice to Cavium during these negotiations. Qatalyst Partners did not, however, recommend any specific consideration to Cavium or that any specific consideration constituted the only appropriate consideration for the Merger.

Qatalyst Partners provides investment banking and other services to a wide range of corporations and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst Partners may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of Cavium, Marvell or certain of their respective affiliates. During the two year period prior to November 19, 2017, the date of Qatalyst Partners’ written opinion, no material relationship existed between Qatalyst Partners or any of its affiliates and Cavium or Marvell pursuant to which compensation was received by Qatalyst Partners or its affiliates. Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to Cavium or Marvell and their respective affiliates for which it would expect to receive compensation.

Under the terms of its engagement letter, Qatalyst Partners provided Cavium with financial advisory services in connection with the Merger for which it will be paid approximately $38 million (provided that the final actual fee will be, in part, based on an average of Marvell’s closing share price over ten consecutive trading days up to and including the second trading day immediately preceding the closing date of the Merger, and, accordingly, the final fee may vary significantly from this estimate), $150,000 of which became payable upon the execution of its engagement letter, $3.5 million of which became payable upon delivery of its opinion, and the remaining portion of which will be paid upon, and subject to, the completion of the Merger. Cavium has also agreed to indemnify Qatalyst Partners and its affiliates, their respective members, directors, officers, partners, agents and employees and any person controlling Qatalyst Partners or any of its affiliates against certain liabilities, including liabilities under the federal securities laws, and expenses related to or arising out of Qatalyst Partners’ engagement.

Opinion of J.P. Morgan

Pursuant to an engagement letter dated November 2, 2017 with an effective date of August 16, 2017, Cavium retained J.P. Morgan as its financial advisor in connection with the proposed Merger.

At the meeting of the Cavium board of directors on November 19, 2017, J.P. Morgan rendered its oral opinion to the Cavium board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the consideration to be paid to Cavium’s shareholders in the proposed Merger was fair, from a financial point of view, to such holders. J.P. Morgan has confirmed its November 19, 2017 oral opinion by delivering its written opinion to the Cavium board of directors, dated November 19, 2017, that, as of such date, the consideration to be paid to Cavium’s shareholders in the proposed Merger was fair, from a financial point of view, to such holders.

The full text of the written opinion of J.P. Morgan dated November 19, 2017, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Annex D to this joint proxy

 

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statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Cavium’s shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Cavium board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Merger, was directed only to the consideration to be paid in the Merger and did not address any other aspect of the Merger. J.P. Morgan expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, creditors or other constituencies of Cavium or as to the underlying decision by Cavium to engage in the proposed Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any shareholder of Cavium as to how such shareholder should vote with respect to the proposed Merger or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

 

    reviewed a draft dated November 18, 2017 of the Merger Agreement;

 

    reviewed certain publicly available business and financial information concerning Cavium and Marvell and the industries in which they operate;

 

    compared the proposed financial terms of the Merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration paid for such companies;

 

    compared the financial and operating performance of Cavium and Marvell with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Cavium common stock and certain publicly traded securities of such other companies;

 

    reviewed certain internal financial analyses and forecasts prepared by or at the direction of the managements of Cavium and Marvell relating to their respective businesses, as well as the estimated amount and timing of cost savings and related expenses and synergies expected to result from the Merger (which, as adjusted by Cavium, as described below in the section titled “The MergerUnaudited Prospective Financial Information—Cavium Unaudited Prospective Financial Information,” are referred to in this section of this joint proxy statement/prospectus as the “Adjusted Marvell Synergies”); and

 

    performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of the management of Cavium and Marvell with respect to certain aspects of the Merger, and the past and current business operations of Cavium and Marvell, the financial condition and future prospects and operations of Cavium and Marvell, the effects of the Merger on the financial condition and future prospects of Cavium and Marvell, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by Cavium and Marvell or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Cavium or Marvell under any applicable laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the Adjusted Marvell Synergies, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of Cavium and Marvell to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the Adjusted Marvell

 

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Synergies) or the assumptions on which they were based. J.P. Morgan also assumed that the Merger and the other transactions contemplated by the Merger Agreement will have the tax consequences described in this joint proxy statement/prospectus, and in discussions with, and materials furnished to J.P. Morgan by, representatives of Cavium, and will be completed as described in the Merger Agreement and this joint proxy statement/prospectus, and that the definitive Merger Agreement would not differ in any material respect from the draft thereof provided to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by Cavium and Marvell in the Merger Agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to Cavium with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the completion of the Merger will be obtained without any adverse effect on Cavium or Marvell or on the contemplated benefits of the Merger.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect its opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the consideration to be paid to Cavium’s shareholders in the proposed Merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration to the holders of any other class of securities, creditors or other constituencies of Cavium or the underlying decision by Cavium to engage in the Merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed Merger, or any class of such persons relative to the consideration in the proposed Merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which Cavium common stock or Marvell common shares will trade at any future time

The terms of the Merger Agreement, including the consideration, were determined through arm’s length negotiations between Cavium and Marvell, and the decision to enter into the Merger Agreement was solely that of the Cavium board of directors and the Marvell board of directors. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Cavium board of directors in its evaluation of the proposed Merger and should not be viewed as determinative of the views of the board of directors or management of Cavium with respect to the proposed Merger or the consideration.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the Cavium board of directors on November 19, 2017 and contained in the presentation delivered to the Cavium board of directors in connection with the rendering of such opinion and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

Public Trading Multiples

Using publicly available information, J.P. Morgan compared selected financial data of Cavium with similar data for selected publicly traded companies in the semiconductor industry:

 

    Inphi Corporation

 

    Integrated Device Technology, Inc.

 

    MACOM Technology Solutions Holdings, Inc.

 

    Marvell Technology Group Ltd.

 

    MaxLinear, Inc.

 

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    Mellanox Technologies, Ltd.

 

    Microsemi Corporation

 

    Semtech Corporation

 

    Silicon Laboratories Inc.

 

    Xilinx, Inc.

These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of Cavium based on business sector participation, operational characteristics and financial metrics. None of the selected companies is identical to Cavium, and certain of the selected companies may have characteristics that are materially different from those of Cavium. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Cavium. Using publicly available information, J.P. Morgan calculated, for each selected company, (1) the multiple of firm value (which is referred to in this section as “FV”) as of November 17, 2017 to estimated EBITDA (earnings before interest, tax, depreciation and amortization and excluding stock-based compensation) for the calendar year 2018 (“FV/EBITDA CY2018E”) and (2) the multiple of closing share price as of November 17, 2017 to estimated earnings per share for the calendar year 2018 (“P/E CY2018E”), in each case based on Wall Street analysts’ consensus estimates. This analysis indicated the following FV/EBITDA CY2018E and P/E CY2018E multiples:

 

     FV/EBITDA
CY2018E
     P/E
CY2018E
 

Inphi Corporation

     17.9x        19.8x  

Integrated Device Technology, Inc.

     15.8x        18.0x  

MACOM Technology Solutions Holdings, Inc.

     13.4x        15.8x  

Marvell Technology Group Ltd. (1)

     10.6x        14.9x  

MaxLinear, Inc.

     13.4x        14.6x  

Mellanox Technologies, Ltd.

     13.3x        19.4x  

Microsemi Corporation

     11.7x        12.0x