Broadcom Acquires Bankrupt Gadzoox Assets

Broadcom is acquiring the assets of Gadzoox
Networks for close to $5.8 million in cash.

Broadcom is specifically acquiring Gadzoox Fibre Channel technology, which
is storage network technology that is interoperable with older networks and
will enable it to offer business data center packages.

Back in January, Gadzoox sought the approval from the bankruptcy court for
the asset purchase agreement. In August 2002, Gadzoox filed for Chapter 11
bankruptcy protection, listing assets of around $10 million, and liabilities
of close to $14 million.

Broadcom’s acquisition will pad its storage networking products, which connect servers, switches and storage system together. Broadcom appears to be most interested in Gadzoox’ use of Fibre Channel technology, which is based on 1-Gigabit, 2-Gigabit and 10-Gigabit Fibre Channel technology, which is interoperable with legacy networks.

Broadcom looks to be focusing on the storage requirements of business data
centers, which will simplify network interoperability. The purchase gives
Broadcom a suite of networking products, which includes multi-port Gigabit
Fibre Channel SerDes (serializers/deserializers), Gigabit Ethernet and iSCSI
controllers, ServerWorks Serial ATA (SATA) controllers and I/O bridges,
multi-protocol Gigabit switch fabrics and SiByte broadband network

Broadcom is in the process of redefining itself, in light of its recent
massive losses and the retirement of its co-founder and CEO Henry Nicholas
III. Broadcom, in its financial statement for the fourth quarter of 2002,
reported a loss of $1.8 billion. Broadcom was emblematic of the technology
boom of the late 1990’s with its stock price hitting $273 in August 2000, on
March 3, 2003 the company’s stock traded around $14.50.

Nicholas’ departure was said by The New York Times on January 26 to
be associated with “this impending divorce,” the report went onto describe
him “as a man of large appetites and demand, prone to throwing tirades and
giving big parties.”

Nicholas presided over Broadcom’s fortune during the most difficult downturn
in the semiconductor industry. Broadcom specializes in integrated circuits
for broadband communications, including computer servers, cable modems,
networking equipment and television set-top boxes.

In a separate development, Broadcom said Monday it filed a complaint with
the U.S. International Trade Commission alleging Microtune infringed on two of Broadcom’s patents. Broadcom is seeking an exclusion order against Microtune’s tuner, power amplifier and Bluetooth products, as well as cable modems, set-top boxes, Bluetooth headsets and PCTV cards containing Microtune chips, which Broadcom claims have been infringed upon.

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