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McDATA Acquires SANavigator Business for $29.75 Million
Asset Acquisition Builds Leadership Edge for McDATA's Enterprise Solutions Architecture Platform
BROOMFIELD, Colo. and SAN JOSE, Calif., Sept. 5 /PRNewswire/ -- McDATA® Corporation (Nasdaq: MCDTA - news, MCDT - news), the worldwide leader in open storage networking solutions, and SANavigator, Inc., the storage network management software subsidiary of Western Digital Corp. (NYSE: WDC - news), today announced they have signed a definitive agreement in which McDATA will acquire from Western Digital substantially all of the assets of SANavigator, Inc., including its SAN management software, for $29.75 million in cash. The asset acquisition supports McDATA's recently announced Enterprise Solutions Architecture(TM) and its commitment to bring customers integrated software solutions that simplify and optimize their core-to-edge enterprise storage networks.
(Photo: newscom.com )
``With the acquisition of SANavigator, McDATA takes a clear leadership position as the only company offering storage network management software that provides visibility and discovery in a multi-vendor fabric environment,'' said Jack McDonnell, CEO, McDATA. ``The acquisition of SANavigator, which will operate as an independent subsidiary, underscores our commitment to interoperability. The acquisition complements our existing software products and technology, provides us with assets that expand our leadership in the emerging open storage network software market, and accelerates our time to market with totally integrated fabric management software solutions.''
Anticipated Benefits of the Transaction
-- Strategically fits with McDATA vision and software mission
-- Achieves realizable value from acquired assets and resources
-- Provides accretion to McDATA earnings per share in a reasonable time
frame
-- Generates additional revenue growth opportunities
-- Integrates into existing channels and significantly expands channel
and partnership opportunities
-- Strengthens current McDATA software product suite and long-term margin
growth potential
-- Extends McDATA's leadership in storage network management and open,
multi-vendor environments
-- Accelerates time-to-market with complete fabric management solutions
The addition of SANavigator's software products to McDATA's storage networking solutions addresses the needs of the storage network management market and simplifies the design, installation, management and growth of open storage networks. In addition it supports and builds upon McDATA's current software platforms -- Enterprise Operating System (E/OS(TM)) and Enterprise Fabric Connectivity Manager (EFCM), both of which provide solid building blocks for powerful software that supports the deployment and management of open storage networks.
When the acquisition closes, Robert Wright, the current president and COO of SANavigator, will be vice president and general manager of SANavigator, Inc., a wholly owned subsidiary of McDATA Corporation. SANavigator, Inc. will continue to be based in San Jose, Calif., and its existing product -- SANavigator(TM) software -- will be available to customers worldwide through SANavigator, Inc. and McDATA.
``McDATA's strong market presence and leadership in the storage networking industry provides broad and deep distribution channels for the SANavigator product,'' said SANavigator president and COO Robert Wright. ``We believe that McDATA's extensive reach in the open storage networking market and its strong commitment to interoperability will enable new and existing customers to benefit from SANavigator's software management applications.''
Anticipated Financial Terms and Conditions
-- The asset acquisition includes the SANavigator(TM) Software,
intellectual property, an experienced management team and a cohesive
storage networking software development organization.
-- The asset acquisition is expected to be accretive to McDATA's earnings
in the first quarter of 2003, excluding non-cash amortization charges.
The acquisition is expected to dilute the company's earnings by
$0.02 per share in the fourth quarter of 2001 and $0.05 - $0.06 per
share in full year 2002, excluding non-cash amortization charges. In
addition, in accordance with the new FAS 141 and 142 rules pertaining
to business combinations and the treatment of goodwill and other
intangible assets, the company anticipates a dilutive, non-cash impact
to reported earnings due to the amortization of certain intangible
assets.
-- One-time costs associated with the asset acquisition are expected to
be $2.5 - $3.0 million, the majority of which are expected to be
incurred in September of 2001.
-- Closing of the transaction is expected by the end of September and is
subject to certain customary closing conditions.
McDATA customers and partners benefit from the acquisition through their ability to utilize SANavigator software to optimize their open storage networks and improve end-to-end management of their infrastructure in a heterogeneous, multi-vendor storage environment. One of the key features found in SANavigator is the ability to view the entire network from a single interface. Additional benefits include greater management functionality, increased visibility, enhanced capacity planning, performance management and asset management capabilities.
McDATA has been in the storage network software market since 1998 and introduced its Enterprise Solutions Architecture mission in July 2001. McDATA's Enterprise Solutions Architecture is the framework for McDATA's Enterprise Operating System (E/OS(TM)) firmware, which supports fabric operation and enables delivery of advanced services, and its Enterprise Fabric Connectivity Manager (EFCM), which consolidates the management of multiple devices on the McDATA fabric to a single console, providing management capabilities for the storage network.
Gartner-Dataquest estimates the storage management software market will reach $13.4 billion in 2004. McDATA estimates the storage network management software market could exceed $1 billion by 2004.
For more information on SANavigator contact SANavigator sales at 408-325-5974 or McDATA at 1-800-545-5773.
Webcast to Discuss Acquisition
McDATA will host a webcast on Wednesday, September 5 to discuss the acquisition. |
