Brocade has entered into a $1.225 billion secured credit facility with Bank of America, N.A. as Administrative Agent, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc. as Joint Lead Arrangers and Joint Bookrunners, Morgan Stanley Senior Funding, Inc. as Syndication Agent and HSBC Bank USA, National Association and Keybank National Association as Co-Documentation Agents and other lenders providing for a $1.1 billion term loan facility and a $125 million revolving credit facility. 
The proceeds from the term loan facility are expected to be used to finance a portion of Brocade’s acquisition of Foundry Networks, which was announced on July 21, 2008. The proceeds from the term loan facility were deposited into a restricted Brocade custody account pending the closing of the acquisition of Foundry and other release conditions.
In addition to using the term loan facility proceeds, Brocade anticipates raising up to $400 million in additional financing as well as using cash on hand (at both companies) and limited proceeds from a portion of the revolving credit facility to fund the acquisition.
The acquisition has cleared US and foreign regulatory review, has been approved by the board of directors of each company, and is subject to vote and approval by Foundry’s stockholders on October 24, 2008, along with certain other closing conditions. The acquisition is expected to close in the fourth quarter of calendar year 2008.http://www.brocade.com
- Brocade agreed 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, representing a total value of $19.25 (based on Brocade’s closing stock price on Friday, July 18, 2008 of $8.27).
The acquisition will position Brocade as a leading provider of enterprise and service provider networking solutions. Brocade currently offers a range of Storage Area Networks (SANs) and File Area Networks (FANs) solutions. The company is based in San Jose, California.
Foundry, which was founded in 1996 and held its initial public offering in September 1999, supplies a range of enterprise and service provider switching, routing, security and Web traffic management solutions, including Layer 2/3 LAN switches, Layer 3 Backbone switches, Layer 4-7 application switches, wireless LAN and access points, metro routers and core routers. The company is based in Santa Clara, California.
