Broadcom Corp. (Nasdaq: BRCM) has officially won the right to acquire bankrupt Fibre Channel switch vendor Gadzoox Networks Inc. (OTC: ZOOX) -- for the net price of about $4.9 million -- marking the end of one of the storage networking industry's pioneers (see Broadcom Bids for Gadzoox).
Last month Broadcom, which develops chips for broadband and networking equipment, submitted an $8.5 million bid for Gadzoox's assets. At a bankruptcy auction today, Broadcom's offer was approved after no other parties came forward, says Nels Nelsen, a partner with Alliant Partners, who advised Gadzoox in its bankruptcy filing.
"It was a little disappointing, because there were a number of other parties who had submitted bids, but in the last two days they indicated that they were not going to move forward," he says. Four other companies put in bids for Gadzoox, but Nelsen would not name them.
Broadcom spokesman Bill Blanning said, "We're delighted with the outcome." He added that the deal for Gadzoox is expected to close in the next 10 days, but declined to comment further.
Gadzoox, founded in 1992, went public in a spectacular IPO in July 1999 and hit a market capitalization of $2 billion that December. The company appeared positioned to become a major player in the Fibre Channel switch market. But it failed to find a way to beat Brocade Communications Systems Inc. (Nasdaq: BRCD), the undisputed leader in the space today, and finally filed for Chapter 11 bankruptcy in August 2002 (see Gadzoox Runs Out of Road and Gadzoox Throws Hail Mary).