Brocade completes McDATA acquisition
has announced that it has completed the acquisition of McDATA Corporation The
transaction closed on Monday, January 29, 2007. As a result of the acquisition,
shares of McDATA class A and B common stock were converted into the right to
receive .75 shares of Brocade common stock and are no longer being traded. Based
on Brocades closing stock price on January 26, 2007, the transaction is
valued at approximately $1.3 billion. In conjunction with the closing
of the acquisition, Brocade detailed an integrated product line and roadmap,
launched a new company branding initiative and announced an additional $200
million stock repurchase authorisation.
The combination of Brocade and McDATA creates the worlds
leading storage networking company with significant benefits for customers,
partners, and shareholders. The Company plans to deliver new levels of
interoperability and SAN management to protect and extend customers investments
as they evolve and grow their data centers. The acquisition also brings
Brocade important new skills and resources that will allow it to further broaden
its range of solutions and services to its customers and OEM partners.
Absolute customer satisfaction is our priority,
said Mike Klayko, Brocades Chief Executive Officer. After
five months of focused integration planning, today we are ready to begin rolling
out the advantages of this combined company to the marketplace. We believe
that our strengthened ability to rapidly deliver innovative technologies, combined
with our industry-leading service and support capabilities, will be crucial
to customers as they grow and evolve their data centers. It is an exciting
day for Brocade.
With the completion of the acquisition, customers should
now have increased confidence and direction from Brocade for their strategic
storage networking investments, said Steve Duplessie, founder of the Enterprise
Strategy Group. Brocades commitment to protect and extend
current customer investments with interoperability and new innovations should
bode well for them. In addition, OEM partners will begin to enjoy a more streamlined
operational and qualification process from the combined entity.
I am very pleased with the integration and planning
work we have already completed which will allow us to fully integrate the combined
companies quickly, said Richard Deranleau, Brocades Chief Financial
Officer. As a result, I remain very comfortable with the annualised
synergies of $100 million by the fourth quarter of combined operations as previously
As a result of operational synergies, the transaction is
expected to be accretive to Brocade on a non-GAAP earnings per share basis by
Q1 08 and the Company expects to operate within its long term financial model
for the first full year of combined operations.
HP looks forward to pursuing new markets with Brocade
and offering our joint customers the highest levels of support, services and
exciting new technologies for the next-generation data center. said Duncan
Campbell, Vice President of Marketing, Storage Works Division, HP.
Both Brocade and McDATA have a rich history of innovation
in storage networking, and have played a vital role in introducing features
and functions that have greatly benefited customers, said Andy Monshaw,
General Manager, IBM System Storage. IBM values its relationship
with Brocade, and we are excited about the potential for further advancements
in networked storage technologies, and the company continuing to create new
categories to address customers pressing needs.