Vitesse Cashes in Storage Chips
Vitesse Semiconductor Corp. said late Thursday that it is selling the bulk of its storage products business to Maxim Integrated Products for $63 million in cash.
Maxim will acquire Vitesse's serial attached SCSI (SAS) and serial attached ATA (SATA) expander product segments, enclosure and baseboard management devices, among other assets of Vitesse's Storage Products Division.
"This sale allows us to focus all our attention on the many growth opportunities we see in our core Networking and Ethernet IC businesses," Vitesse CEO Christopher Gardner said in a statement.
Vitesse may also receive cash earn-out payments of up to $12 million if certain milestones are met, and the company also announced $30 million in new financing to shore up its balance sheet. The deal is expected to close in the fourth quarter.
In other news on the storage finance front, Brocade announced late Thursday that its July third quarter sales were $327.5 million, down 5 percent sequentially from the April quarter. The company said the quarter is one of its seasonally weaker periods, and added that some of the weakness was due to McData director customers waiting for a new merged platform (see Brocade Gets Busy).
Brocade CEO Michael Klayko said in a statement, "In just two quarters, we have met or exceeded the vast majority of our target business metrics related to the acquisition of McData, and have strengthened our combined profitability and business fundamentals. We believe we are well positioned competitively and our leadership position is unchanged."