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Brocade Bags McData For $713M

The long predicted merger of leading switch vendors Brocade and McData finally came to pass today with Brocade's plan to acquire its rival for $713 million. (See Brocade Buys McData.)

Financial analysts began chattering about such a union ever since Cisco entered the Fibre Channel switch market less than four years ago. (See Cisco Gets Set.) And in fact, Cisco has made gains in the past few years, especially in the FC director space and mostly at McData's expense. (See Cisco Storage Rebounds.) Preliminary earnings reports for the last quarter issued by both companies today underscore this point: Brocade continued its recent success while McData stumbled again.

And apparently, the two storage vendors have flirted with each other in recent years, but they couldn't get the timing right. A source close to both companies says Brocade approached McData several times but was rebuffed. McData also initiated such discussions at times that Brocade was not interested.

This time, Brocade CEO Mike Klayko approached McData CEO John Kelley, and Kelley agreed to sell.

"We've had this conversation for awhile," Klayko said about acquisition talks today on a call with investors. "A couple of months ago I picked up the phone and called John. The last couple of months we chatted. The last couple of weeks it went very, very fast."

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