Brocade acquires Silverback for storage chips

IDG News Service - Storage network equipment maker Brocade Communications Systems Inc. has acquired Silverback Systems Inc. for its network acceleration processor technology.

Brocade did not say yesterday how much it paid for privately held Silverback, but said it was "not material," meaning it's not enough money to have to be reported to shareholders.

Brocade is a maker of products and services that connect storage-area networks together. Silverback specializes in processors that speed up the movement of data within a network using the iSCSI network protocol.

"Silverback’s technology and expertise in iSCSI environments will help us to deliver a new set of cost-effective products that broaden the Brocade product portfolio," said Dan Crain, chief technology officer at Brocade, in a prepared statement.

Brocade posted net income of $19 million, or 7 cents a share, on revenue of $750 million in fiscal year 2006, which ended Oct. 28, 2006.

This is the third acquisition for Brocade in the last 10 months. It acquired NuView Inc. in March of last year for an undisclosed price and announced plans in August to acquire McData Corp. for $713 million. The McData deal is still pending.

Brocade has been caught up in the stock options backdating scandal affecting more than 100 U.S. companies. Brocade's former CEO, Gregory Reyes, and two other former executives were charged with securities fraud in July 2006 in federal district court. They had been forced out of Brocade in 2005, and the company had to restate earnings, due to alleged accounting irregularities. Brocade is facing federal civil charges in connection with the case.