Intel acquires Pivot's software business for $27 million

In the early morning of October 16, Intel said that the company has agreed to acquire a software business of Toronto software company Pivot Technology Solutions (hereinafter referred to as "Pivot") for US$27 million. 

Intel said it would acquire Pivot's Smart Edge business, which makes software that helps segment and store data closer to users so computing devices can respond more quickly. The software is designed to run on Intel chips, which are known for making the chips that are the heart of most PCs, but Intel now aims to sell it to 5G devices, the next generation of wireless data networks that will begin rolling out this year.

Smart Edge did not generate much revenue in the first six months of 2019, but had a loss before depreciation and amortization of about $1 million, according to securities filings by Pivot, which has a market value of about $43 million and was granted a U.S. patent for its Smart Edge technology in July.

Intel, which expects to close its Smart Edge acquisition in the fourth quarter, sees 5G as an opportunity to expand sales beyond its two biggest business segments, PCs and data centers.

In 5G networks, more data will be stored on computers scattered near base stations and other network equipment, which is known in the industry as "edge computing." Edge computing is expected to help large files such as videos appear on users' screens faster than if the data is stored in a central data center.

“We plan to leverage our technology and teams to accelerate the growth of the edge computing market,” Dan Rodriguez, general manager of Intel’s Data Center Group’s Network Computing Division, said in a statement.

After the news broke, Intel's stock price rose 1.96% in regular trading on the Nasdaq on Tuesday, closing at US$52.65; Pivot's stock price rose 1.40% in Toronto trading, closing at C$1.45.