For at least the third time since 2009, Brocade, a leading maker of switches and routing hardware and the leading player in the 16Bb fiber channel space, is on the market. But unlike recent high-profile sales which have involved major infrastructure players being acquired by large enterprise vendors, it appears that the most likely buyer for Brocade, should it actually sell, will be a private equity firm who would then need to restructure Brocade (or various bits and pieces of the company) as attractive targets for acquisition.
It is possible that a major technology player could acquire Brocade to supplement their portfolio with IBM, Dell and Oracle all being mentioned. Analyst Rajesh Ghai was quoted by Reuters as saying that he thought that Brocade was a good fit for Oracle, plugging an existing hole in Oracle’s plans to become an end-to-end datacenter provider.
Qatalyst Partner’s was hired in November 2011 to handle the sale process and reports are being received that a first round of bids has been received, all from private equity firms. Brocade has a market cap of $2.7B, so that gives some idea of what the bids are likely to be, in lieu of any sort of bidding war. This relatively low market cap is in spite of Brocade’s $2.6B purchase of Foundry Networks only two years ago.
With more than 20 years of published writings about technology, as well as industry stints as everything from a database developer to CTO, David Chernicoff has earned the term "veteran" in the technology world.
Disclosure
David Chernicoff
David does not invest in the technology he covers. As a freelance author and technologist he has had contract work with many vendors in the industry. Beyond the term of these short-term contracts there is no business or fiduciary arrangement with any technology vendor. David does not enter into contracts that would limit his freedom of expression in any way, nor is he remunerated for discussing any vendor. All comments in his blog writings are solely the opinions of David Chernicoff.
Biography
David Chernicoff
With more than 20 years of published writings about technology, as well as industry stints as everything from a database developer to CTO, David Chernicoff has earned the term "veteran" in the technology world. Currently the principal of an independent consulting business and an active freelance writer, David has most recently been a Senior Contributing Editor for Windows IT Pro magazine, having also been the Lab Director for Windows NT Magazine, Technical Director of PC Week Labs, the author or co-author of a number of books on different versions of Windows, a plethora of eBooks on various technology topics, and of approximately 3000 magazine articles in print and on the web.
