Broadcom Acquires Bankrupt Gadzoox Assets -

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, storage network technology that is interoperable with older networks and that 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 systems together. Broadcom appears to be most interested in Gadzoox's use of Fibre Channel technology, which is based on 1-Gigabit, 2-Gigabit and 10-Gigabit Fibre Channel technology.

Broadcom looks to be focusing on the storage requirements of business data centers. The purchase gives Broadcom a suite of networking products that 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 processors.

Broadcom specializes in integrated circuits for broadband communications, including computer servers, cable modems, networking equipment and television set-top boxes. The company 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.

In its financial statement for the fourth quarter of 2002, Broadcom reported a loss of $1.8 billion. The company rode the technology boom of the late nineties but stumbled at the turn of the Millennium. Broadcom's stock price hit $273 a share in August 2000; today the company's stock trades for around $14.50 a share.

Nicholas' departure was said by The New York Times on January 26 to be associated with "this impending divorce." The report also 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.

In a separate development, Broadcom said Monday it filed a complaint with the U.S. International Trade Commission alleging that Microtune has 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 infringe upon the patents.

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