Foundry stockholders OK merger with Brocade

Foundry Networks stockholders approved the company's merger with Brocade at a special meeting held Dec. 17. The $2.6 billion union is one of the network industry's biggest this year. 

Brocade expects to close the acquisition on Dec. 18, subject to the satisfaction of customary terms and conditions. At the closing, each outstanding share of Foundry common stock will be exchanged for $16.50 in cash.

In addition, Foundry completed the sale of its portfolio of auction rate securities. Based on estimated net proceeds of $38.8 million from the sale, Foundry expects to pay stockholders a cash dividend of $0.249 per share immediately prior to the completion of the merger.

The final dividend amount will be based on Foundry's fully diluted share count as of the time of the completion of the merger.

Brocade also said it believes it will not require any supplemental financing to close the transaction. The company said net proceeds from a $1.1 billion term loan facility combined with the cash on hand at the two companies, along with a small draw under its revolver credit line, are sufficient to finance the transaction.