Brocade CEO Carney Says Not Planning Sale of the Company
Brocade Communications Systems Inc. (BRCD)’s newly appointed Chief Executive Officer Lloyd Carney said there are no plans to sell the networking-equipment maker, which had been seeking a buyer under his predecessor.
While Brocade is “best as a standalone player” and not a “short-term proposition,” fiduciary responsibility would require him to look at any “stupid money” offers, Carney said in an interview. Carney, who has experience selling companies, was named on Jan. 14, replacing Mike Klayko.
Most recently, Carney was CEO of Xsigo Systems Inc., which was bought by Oracle Corp.. (ORCL) Previously, he led Micromuse Inc., which was sold to International Business Machines Corp. (IBM) in 2006. Brocade had enlisted technology-investment banker Frank Quattrone to seek buyers, a person familiar with the matter said in July, pitching its products as a way for companies such as Dell Inc. and Oracle to expand in cloud-based computing.
“This is not a short-term proposition,” Carney said of his new position. “If someone shows up with stupid money, I have to listen to it. But my history is I’m not a quick-turn guy. I’ve never done that.”
Carney pointed out that he was at Xsigo for five years and Micromuse for three before the sales occurred.
While Brocade’s strong cash flow and prominent market position have made the company an attractive takeover candidate, it has failed to find a buyer for the past three years. When Brocade said last August that Klayko, CEO since 2005, would resign, the move was seen as a step by the board to expedite a sale of the company.
San Jose, California-based Brocade was unchanged at $5.64 at the close in New York, and earlier fell as low as $5.58 following the publication of Carney’s interview. The shares advanced 2.7 percent during 2012.
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