Brocade acquires McData

Vendor claims latest buy will help it generate $100m annual revenue

Network storage vendor Brocade has acquired McData for approximately $713m.

The acquisition is expected to close by Brocade's first fiscal quarter of 2007, until which time both businesses will operate separately. McData will become a wholly owned subsidiary of Brocade's and the vendor claimed it will enable it to generate annual revenue of $100m through the acquisition.

Michael Klayko, chief executive of Brocade, said in a statement: "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."

John Kelley, chief executive of McData, will serve as an administrator to Brocade. Kelly said: "We believe this combination is a win for our customers and our investors."

Hamish MacArthur, chief executive of MacArthur Stroud International, told CRN that the McData brand was likely to be dissolved into Brocade's.

"There's ongoing consolidation in the industry, so this was no great surprise," he said. "I anticipate that Brocade is trying to get a broader scale and play against some of the larger rivals, like Cisco."

The announcement also follows the expansion of a hardware relationship between Brocade and Hewlett-Packard, adding three storage networking products to HP’s StorageWorks division (CRN, 7 July).