Stock purchase plan to fund Brocade's acquisition of Foundry Networks

By Lisa Kerner

Charlotte, N.C., Aug. 14 - Brocade Communications Systems, Inc. adopted a prearranged, automatic stock purchase plan under Securities and Exchange Rule 10b5-1 to assist Brocade in the acquisition of up to $250 million of common stock of Foundry Networks, Inc.

The 10b5-1 plan allows Morgan Stanley & Co. Inc. to purchase shares of Foundry common stock in the open market beginning Aug. 14, a form 8-K filed with the SEC stated.

In July, Brocade, a San Jose, Calif., network storage equipment company, announced it had agreed to purchase Foundry Networks for $3 billion in stock and cash.

Under the agreement, Brocade will pay $18.50 per share in cash plus 0.0907 Brocade shares in exchange for each Foundry common share, or for a total value of $19.25 based on Brocade's closing price of $8.27 on July 18, it was previously reported.

According to Brocade, it would finance the acquisition through cash on hand at both companies and about $1.5 billion of committed debt financing from Bank of America and Morgan Stanley Senior Funding, Inc.

Brocade is a San Jose, Calif.-based storage area network equipment provider.

Foundry is a Santa Clara, Calif.-based provider of network switching and routing.

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