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  • Brocade to Buy McDATA for $713 Million

    August 21, 2006 Alex Woodie

    Brocade Communications Systems, a manufacturer of switches used in storage area networks (SANs), plans to buy rival McDATA in an all-stock transaction valued at $713 million.

    Michael Klayko, CEO for San Jose, California-based Brocade, said the acquisition of McDATA will build on Brocade’s vision for the next-generation data center. “This combination will accelerate the pace of innovation, enable us to build stronger relationships with our customers and partners, and provide greater scale and efficiencies to accelerate our growth,” Klayko says.

    John Kelley, chairman, president, and CEO of Broomfield, Colorado-based McDATA, says the deal benefits customers and investors. “For our customers, it provides the investment protection and a clear path to next-generation data center products and technologies,” he says.

    The companies say the merger will bolster their profitability–possibly by as much as $100 million within a year–by pooling their resources and eliminating redundancies, although the companies didn’t discuss specifics relating to headcount reductions. The companies also need to explain the converged product roadmap going forward.

    The transaction has been unanimously approved by the boards of directors of both companies, and could be completed as soon as Brocade’s first fiscal quarter of 2007, which ends January 31, 2007.

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    Tags: Tags: mtfh_rc, Volume 15, Number 33 -- August 21, 2006

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TFH Volume: 15 Issue: 33

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    Table of Contents

    • IBM to Spend $100 Million in 2006 to Drive Express Offerings at SMB Shops
    • Vanguard Systems, Document Imaging Solutions Merge
    • Bang for the Buck: Midrange i5 Servers Versus the Competition
    • Brocade to Buy McDATA for $713 Million
    • Does the Size of Your IT Supplier Really Matter?
    • WebSphere Wears Enterprise Portal Software Crown Again
    • ERP Software: Its Effect on Performance and Productivity, Part 2
    • AMR Research Says HCM and CRM Markets Are Growing Faster than ERP
    • The X Factor: Database Appliances Come Around Again
    • SaaS Is Real: Salesforce.com Boasts of 500,000 Subscribers

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