Brocade Acquisition Bid Rumors Goose Stock Price


Shares of Brocade jumped as much as 12 percent Monday following a published report that the company has received buyout bids from several potential acquirers, many of them private equity firms.

Brocade is said to have been seeking a buyer for the past two years, and is said to be working with investment banker Frank Quattrone's Qatalyst Partners to find a mate. On Monday, Reuters cited anonymous sources as saying Brocade has held talks with at least six potential buyers, including private equity firms like Silver Lake Partners, Bain Capital, Warburg Pincus and Kohlberg Kravis Roberts & Co.

Brocade has been a frequently-mentioned acquisition target for years. Earlier this year, the company was said to have been close to a deal with Dell, which ended up buying data networking vendor Force10 instead. The Reuters report indicated that one private equity firm was in on a Brocade deal in 2010, only to have the deal collapse over a "price discrepancy," and that HP was also in the mix to acquire Brocade before settling on 3Com in late 2009.

[Related: 12 Recent Networking Mergers and Acquisitions To Keep An Eye On]

Brocade did not respond to a request by CRN for comment on the buyout speculation.

As a channel vendor, Brocade has made steady gains since its acquisition of Foundry Networks in 2008 turned it into a converged networking and data center vendor. In November, Brocade added more lucrative deal registration and MDF terms to its Alliance Partner Network program, as well as partner enablement fund for bringing new Brocade partners up to speed with the vendor more quickly.