Nortel Networks Corp NRTLQ:OTC
IBM Scooping Up Companies; Buys Switch Maker Blade Network
Monday 09/27/2010 7:19 PM ET - Dow Jones News
By Scott Denne
OF DOW JONES VENTUREWIRE
International Business Machines Corp . (IBM) is continuing its buying spree with its agreement to acquire Blade Network Technologies Inc., a maker of Ethernet switches.
Terms of the deal were not disclosed.
With $30 million in equity financing from Garnett & Helfrich Capital, Blade Network was spun out ofNortel Networks Corp . in early 2006. A year ago, the Santa Clara, Calif.-based company raised a $10 million Series B that brought in NEC Corp . (6701.TO), Juniper Networks Inc. and another undisclosed technology company as investors, giving the company a $240 million valuation.
Representatives of IBM declined to comment. Garnett & Helfrich, which owns a majority stake in the business, did not return calls seeking comment.
Blade Networks makes switches built for blade server environments and claims to move virtual servers around a data center without the need to reconfigure each one's network settings. The company finished 2009 with $79 million in sales and was targeting more than $100 million this year.
IBM has resold Blade Network's products since 2002 and though Blade Networks has several similar OEM deals with other companies, like NEC andHewlett-Packard Co . (HPQ), it has an especially "strong fit" with IBM, said Tim Shaughnessy, its vice president of marketing.
This acquisition, which brings IBM its first networking switch, is Big Blue's 14th deal this year. Other venture-backed companies it acquired include desktop management company BigFix Inc., data integration company Cast Iron Systems Inc. and data compression company Storwize Inc.
The year it was founded, Blade Networks had sales of $30 million. It is profitable, with zero debt and $27 million in its bank account, the company's chief executive, Vikram Mehta, told VentureWire in February.
The deal is expected to close by the end of the year.
(This story also appears in Dow Jones VentureWire, a daily newsletter that covers venture-capital investing and start-up companies.)
-By Scott Denne, Dow Jones VentureWire, 212-416-2028; scott.denne@dowjones.com
(END) Dow Jones Newswires
09-27-10 1919ET
Copyright (c) 2010 Dow Jones & Company, Inc.
OF DOW JONES VENTUREWIRE
Terms of the deal were not disclosed.
With $30 million in equity financing from Garnett & Helfrich Capital, Blade Network was spun out of
Representatives of IBM declined to comment. Garnett & Helfrich, which owns a majority stake in the business, did not return calls seeking comment.
Blade Networks makes switches built for blade server environments and claims to move virtual servers around a data center without the need to reconfigure each one's network settings. The company finished 2009 with $79 million in sales and was targeting more than $100 million this year.
IBM has resold Blade Network's products since 2002 and though Blade Networks has several similar OEM deals with other companies, like NEC and
This acquisition, which brings IBM its first networking switch, is Big Blue's 14th deal this year. Other venture-backed companies it acquired include desktop management company BigFix Inc., data integration company Cast Iron Systems Inc. and data compression company Storwize Inc.
The year it was founded, Blade Networks had sales of $30 million. It is profitable, with zero debt and $27 million in its bank account, the company's chief executive, Vikram Mehta, told VentureWire in February.
The deal is expected to close by the end of the year.
(This story also appears in Dow Jones VentureWire, a daily newsletter that covers venture-capital investing and start-up companies.)
-By Scott Denne, Dow Jones VentureWire, 212-416-2028; scott.denne@dowjones.com
(END) Dow Jones Newswires
09-27-10 1919ET
Copyright (c) 2010 Dow Jones & Company, Inc.
