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AS OF 12/4/2008 12:16AM EST

Brocade Acquires Foundry
By Jeff Feinman

July 22, 2008 — Brocade reached a definitive agreement to purchase Foundry Networks, a network switching and routing company, at a hefty price of US$3 billion.

The acquisition, announced yesterday, will strengthen Brocade’s enterprise and service provider networking products, the company said. John Noh, a spokesman for Brocade, said the acquisition brings together two companies on different sides of the networking market: Brocade from the data center side, and Foundry from the data networking and Ethernet/IP networking side.

“There’s hardly any overlap between the two companies, so anything Foundry brings is completely additive to our business,” Noh said. “The data center networking space has a market run rate of about $2 billion a year. The Ethernet market alone is a $20 billion market. The fact that we’ll be getting into the service provider and Ethernet markets are a big positive for us.”

Foundry is based in Santa Clara and was founded in 1996. The company has approximately 1,100 employees, and its products include Layer 2/3 LAN switches, Layer 3 Backbone switches, Layer 4-7 application switches, metro routers and core routers.

Steve Duplessie, founder and senior analyst for Enterprise Strategy Group, said, “[The deal] makes sense at first blush. Foundry has core Ethernet switching stuff, and Brocade sits in all the big company SANs.”

When asked about the $3 billion price tag in Brocade’s biggest acquisition to date, Noh said, “We considered what new markets and opportunities this opens for us and what synergies we could leverage, and we believe the evaluation is fair and this is a good deal for both companies.”

Related Search Term(s): Ethernet, networking, Brocade, Foundry

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