QLogic to acquire Ancor

By Zachary Shess

QLogic last month announced plans to purchase Fibre Channel switch vendor Ancor Communications in an approximately $1.7-billion stock swap. Officials at Aliso Viejo, CA-based QLogic say the acquisition will enable them to broaden their Fibre Channel product line while positioning the company to address future market issues and technologies.

LARRY FORTMULLER, vice president of marketing, QLogic
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"We see SANs [storage area networks] growing dramatically," says Larry Fortmuller, vice president of marketing at QLogic, "and as they grow, host bus adapters become a lower percentage of the overall SAN purchase because we're moving to switched environments. We want to address as much of this market as possible."

While QLogic and Ancor will pursue Fibre Channel and other SAN opportunities near term, down the road the merger could be remembered as the precursor to the companies' first substantial step toward developing InfiniBand-compliant technology.

"I think this merger provides a strong InfiniBand infrastructure provider, both on a switch and an HBA level, and then a router level at some later date," says Richard Lee, president of Data Storage Technologies, a consulting firm in Ridgewood, NJ. "I think the merger is less for the Fibre Channel future and more for the InfiniBand future."

Fortmuller acknowledges that InfiniBand development was one of the considerations of the merger. Combining the companies gives them an opportunity to approach InfiniBand from "a much broader perspective than just a host bus adapter manufacturer," says Fortmuller. However, standards historically have taken years to be defined and adopted, making it difficult to estimate the time frame for InfiniBand product rollouts (see InfoStor, March, p. 1).

Both companies' board of directors have approved the acquisition, which is still subject to shareholder and regulatory approval. Upon approval, QLogic will exchange 0.5275 shares of common stock for each share of Ancor common stock. Ancor will then operate as a wholly owned subsidiary of QLogic.

This article was originally published on June 01, 2000