History 2005: McData to Buy CNT for $235 Million

McData will buy rival CNT in a stock swap in which each share of CNT common stock will be converted into the right to receive 1.3 shares of McData Class A common stock.

This translates into a total value of $161 million, not counting the fact that McData will assume $74 million in net debt, giving the deal a total value of $235 million.

After the acquisition is completed, McData will own 76% of the combined company and CNT shareholders will own 24%. The purchase is expected to close before July. Break-up fee under certain circumstances is $11 million.

McData’s current president, CEO and chairman John Kelley will continue to lead the company, while Tom Hudson, who holds the same 3 titles at CNT, is expected to assume a senior executive role in the new organization.

This article is an abstract of news published on issue 205 on January 2005 from the former paper version of Computer Data Storage Newsletter.