Brocade acquires Silverback for storage chips

Brocade has acquired Silverback Systems to strengthen its storage networking product portfolio

Storage network equipment maker Brocade Communications Systems has acquired Silverback Systems for its network acceleration processor technology.

Brocade did not say 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 (Internet Small Computer System Interface) 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 of Brocade, in a prepared statement.

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

This is the third acquisition for Brocade in the last 10 months. It acquired NuView in March of last year for an undisclosed price and announced plans in August to acquired McData for US$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 chief executive officer, 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.

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