Brocade announces agreement to acquire Foundry Networks for $3 billion
Storage network specialist Brocade looks set to take over Foundry Networks, the specialist manufacturer and provider of enterprise network technologies. A press release issued by Brocade confirms that the company will pay $18.50 in cash plus 0.0907 shares of Brocade common stock, for each Foundry share. This gives the transaction an aggregate purchase price of $3 million. The acquisition is expected to go through in the fourth quarter of 2008. Although the boards of both companies have approved the acquisition, it still has to gain the approval of Foundry's shareholders.
Foundry Networks was established in 1996. It has a workforce of 1100 and manufactures routers, switches and related products. The company's second quarter results, published yesterday, showed a year-on-year increase in quarterly revenues from $143 million to $161 million. Brocade expects the acquisition of Foundry Networks to round off its centralised data management portfolio.