Brocade’s new exec sees no pressing need for M&A

* McHugh hired in March

* Sees no need to be bought

* Says has all assets necessary for next 5-10 years

By Ritsuko Ando

NEW YORK, May 3 (BestGrowthStock) – Brocade Communications Systems
Inc’s (BRCD.O: ) new executive sees no pressing need for the
network equipment maker to be acquired, despite the market’s
speculation it wanted to be bought.

John McHugh was hired in March as chief marketing officer
in charge of global marketing and strategic alliances and
analysts have cited his M&A experience as an asset for the
company in a possible sale to a big technology vendor.

While announcing a new technology venture with EMC Corp
(EMC.N: ) on Monday, McHugh shrugged off speculation he was
brought in to help sell the company, which competes with
industry leader Cisco Systems Inc (CSCO.O: ).

The company, which bought Foundry Networks in 2008, was
already diversified enough to meet customers’ needs, he said.
The combined company sells fiber channel backbones switches and
other network equipment that direct Internet traffic.

“It doesn’t require at this point an acquisition in either
direction. We really believe we have all the assets we need
right now to be able to deliver industry leading solutions for
customers,” he told Reuters in an interview.

McHugh oversaw Nortel Networks’ divestiture of the
enterprise network solutions business. He also worked at
Hewlett-Packard Co (HPQ.N: ) and experienced M&A deals at private
equity firm Silver Lake Partners.

But deal making was not a priority at Brocade for now.

“We’re pretty hunkered down here. We believe we have
exactly the right portfolio to address what we think our
customers need during this next five to 10 years,” he said.

Sources told Reuters in October that Brocade had put itself
on the block, although Chief Executive Michael Klayko denied
this.

The company was widely seen as having missed out on a
buyout opportunity when Hewlett-Packard chose to buy 3Com Corp,
but rumors have persisted, with Dell Inc (DELL.O: ) and
International Business Machines Corp (IBM.N: ) coming up as
possible bidders.

Large technology companies are seeking to expand product
portfolios and become “one stop shops” for customer technology
needs. Smaller manufacturers are believed to be open to buyouts
as a way of securing solid sales.

For now, the company has emphasized partnerships as a key
growth strategy.

On Monday, Brocade said it would work with EMC to invest in
new technologies to improve the efficiency of data centers. The
aim is to ensure their mutual customers can run a wide range of
software, including Microsoft Corp (MSFT.O: ) and Oracle Corp
(ORCL.O: ) applications in a more “virtual” environment, meaning
less hardware and lower operating costs.

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(Reporting by Ritsuko Ando; editing by Andre Grenon, Bernard
Orr)

Brocade’s new exec sees no pressing need for M&A