Brocade Communications Systems to Acquire McData

Third Quarter Revenues Expected to be a Record 188 to 189 Million Dollar

(10.08.06) - Brocade (Nasdaq: BRCD) and McData (Nasdaq: MCDTA/MCDT) announced that they have entered into a definitive agreement whereby Brocade will acquire McData in an all stock transaction.

Under the terms of the agreement, McData stockholders will receive 0.75 shares of Brocade common stock for each share of McData class a common stock and each share of McData class B common stock they hold. Based on Brocade's closing stock price on August 7, 2006, the trans-action is valued at approximately 4.61 Dollar per McData share, or approximately 713 million Dollar.

Upon completion of the transaction, McData stockholders will own approximately 30 percent of Brocade. The transaction is expected to be tax-free to McData stockholders.

Increase 3 percent sequentially And 54 percent year-over-year

Brocade Communications Systems, Inc. (Nasdaq: BRCD) announced preliminary results for the third quarter of fiscal 2006 (Q3 06), ending July 29, 2006. Brocade expects to report net revenue for Q3 06 in a range of 188 to 189 million Dollar and diluted GAAP earnings per share of 0.08 to 0.09 Dollar.

This represents revenue growth of 3 percent from revenue of 182.7 million Dollar reported in the second quarter of fiscal year 2006 and 54 percent from revenue of 122.3 million Dollar reported in the third quarter of fiscal year 2005. (Brocade: McData: ra)

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