Brocade announced it plans to acquire Foundry Networks, in a deal valued at approximately $3 billion.
Under the agreement, Brocade will pay a combination of $18.50 of cash plus 0.0907 shares of Brocade common stock in exchange for each share of Foundry common stock, for a total value of $19.25 per share, the two companies said in a joint press release issued Monday.
Santa Clara, Calif.-based Foundry is a 12-year-old company that does enterprise and service provider switching and routing. Brocade's CEO praised it as "strong and well-respected" in their industry, during a conference call with investors and media Monday.
It appears that Brocade could be turning a page in a year that has thus far been a public relations nightmare for the company. In January, the company's former CEO was handed a long jail sentence for criminal misconduct. And last month the company found out it would be paying $160 million for Brocade Communications to settle a federal securities class action lawsuit tied to the company's stock option backdating practices.
On the conference call, CEO Mike Klayko said the two companies share a vision for the future of next-generation data centers and networks and that there are plenty of synergies between them that Brocade will take advantage of.
Brocade and Foundry's boards of directors have both approved the deal, but the acquisition is still pending the votes of Foundry's shareholders.
They expect the deal to be finalized in the fourth quarter of this year.