Foundry shareholders OK merger with Brocade

Foundry Networks shareholders have approved a merger with Brocade Communications, overcoming what seems to be the last major hurdle in an exceedingly deal that had been questioned as stock and credit markets plunged.

Brocade declared in July it might purchase metalworks for regarding US$3 billion, a deal that might bring a aggressive vender of enterprise computer network gear into one in all the foremost suppliers of data-center network gear. In early Oct, as stock markets plummeted and credit tightened up, Brocade succeeded in obtaining a $1.1 billion term loan facility and $125 million consumer credit facility for the deal from a gaggle of banks.

But in late Oct, metalworks according a fall in third-quarter profit, blaming prices related to the planned merger. The metalworks shareholders’ vote on the deal was delayed over once, whereas Foundry’s stock fell sharply. In late Oct, Brocade same it had lowered its bid from the first $19.25 per share to regarding $16.50 per share, or $2.6 billion. The amended deal additionally enclosed the sale of Foundry’s auction-rate securities, that materialized Tuesday for associate calculable $38.8 million.

On Wed, a majority of metalworks shareholders voted in favor of the merger, the businesses same in an exceedingly promulgation. Brocade same that the yield from its loan, and money reachable at each corporations and different funds, area unit enough to finance the deal. Brocade expects the deal to shut weekday.