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.

Vitesse will retain its RAID-on-Chip (ROC) and Fibre Channel product segments, which the company said complement its renewed focus on its Networking and Ethernet divisions.

“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.”

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Paul Shread
eSecurity Editor Paul Shread has covered nearly every aspect of enterprise technology in his 20+ years in IT journalism, including an award-winning series on software-defined data centers. He wrote a column on small business technology for Time.com, and covered financial markets for 10 years, from the dot-com boom and bust to the 2007-2009 financial crisis. He holds a market analyst certification.

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