Who will buy Brocade?

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.