Intel agreed to buy software business Smart Edge from Pivot Technology Solutions for $27 million.

Smart Edge, a software that helps split data and store it closer to users to make computing devices respond faster, was developed to run on Intel processors.

The software can be used to complement 5G technology being rolled out later this year, which Intel will seek to sell to the makers of 5G equipment.

“This transaction enhances Intel’s ability to address the 5G network transformation with a leading position in edge computing,” said Dan Rodriguez, vice president and general manager of the Network Compute Division in Intel’s Data Center Group. “We plan to take full advantage of our combined technologies and teams to accelerate the development of the edge computing market.”

Experts say 5G networks will rely more heavily on data stored on technology distributed across a cellular network rather than centralized around data centers or clouds, making edge computing systems such as Smart Edge more critical.

Pivot was issued a U.S. patent on Smart Edge’s technology in July. The company, based in Toronto, has an estimated market value of about $43 million.

According to Pivot’s securities filings, Smart Edge did not generate significant revenue in the first half of 2019 and saw a loss of about $1 million before depreciation and amortization.

Smart Edge chief executive officer Bob Pike and about 25 additional Smart Edge employees will join Intel’s Network and Custom Logic Group after closing.

Under the terms of the deal, Intel and Pivot will sign a “preferred partner agreement” naming Pivot as an authorized Smart Edge reseller. Pivot would also be Intel’s non-exclusive preferred systems integrator for services based on Smart Edge.

Intel said it expects to close the Smart Edge deal in the fourth quarter.

Intel shares were up nearly 1% following the news, Pivot shares were up nearly 5% on the news.

Joan Cros/NurPhoto via Getty Images

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