Brocade Communications Systems Buys Competitor

Brocade Communications Systems announced plans to acquire Rhapsody Networks, a privately held provider of intelligent switching platforms. Brocade, which provides infrastructure solutions for Storage Area Networks (SANs), will leverage the acquisition to deliver an open, intelligent platform for fabric applications. The new products will be fully interoperable with the Brocade SilkWorm family of Fibre Channel fabric switches. The company plans to work with OEMs to make the first product that incorporates Rhapsody's equipment available by the end of 2003. Brocade competes with Cisco Systems in storage networking. Cisco recently purchased Andiamo Systems to strengthen its offerings in a deal that could be worth as much as $2.5 billion.

Brocade's acquisition is estimated to be worth $175 million. The deal, which is expected to close in January, calls for Brocade to purchase Rhapsody for 23.4 million shares of Brocade common stock, which is about 10 percent of Brocade's outstanding shares.
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