[EMULEX GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
Investor Contact: Michael J. Rockenbach Press Contact: Robin Austin
Chief Financial Officer Director, Public
(714) 885-3695 Relations
(714) 885-3462
Emulex Corporation to Acquire Sierra Logic, Inc.
Acquisition Expands Company's Position in Embedded Storage Components
Market and Delivers End-to-End Multi-Protocol Solutions
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COSTA MESA, Calif. and ROSEVILLE, Calif., August 29, 2006 - Emulex
Corporation (NYSE:ELX) and Sierra Logic, Inc. announced today the two companies
have signed a definitive agreement whereby Emulex will acquire Sierra Logic,
Inc., a leading provider of embedded ASIC components and firmware solutions for
enterprise storage systems.
The acquisition of Sierra Logic expands Emulex's position in the market
for embedded multi-protocol storage products. Sierra Logic's current product
portfolio, which includes embedded bridges and routers, enables connectivity of
low-cost Serial Advanced Technology Attachment (SATA) disk drives within Fibre
Channel-based enterprise storage systems. Further, these products are deployed
by the world's leading OEMs in conjunction with Emulex's existing InSpeed
embedded switches and I/O Controller (IOC) products to provide a fully
complementary embedded end-to-end solution.
"This acquisition solidifies Emulex's embedded multi-protocol strategy and
is another critical step toward becoming the market leader in the end-to-end
embedded storage components market. The expansion of our embedded product
portfolio also provides incremental revenue opportunities and we believe
extends Emulex's addressable market for embedded storage components to more
than $800 million, and the Company's total available market to $2.7 billion by
2009," said Paul Folino, Chairman and CEO of Emulex. "Further, it builds upon
our prior acquisition of embedded switch supplier, Vixel, as well as our joint
development efforts with Intel. Together, Emulex and Sierra Logic will provide
our OEM customers with embedded solutions for the full range of enterprise
server and storage systems."
Under the terms of the agreement, Emulex will acquire Sierra Logic for a
transaction value of up to approximately $180 million in cash, assumed debt and
assumed Sierra Logic stock options, plus employee equity incentive
compensation. The board of directors and shareholders of Sierra Logic have
approved the acquisition and it is expected to be complete on or near September
30, 2006, subject to certain closing conditions. Sierra Logic consists of
approximately 70 employees, primarily engineers based in Roseville, California.
Emulex will incur charges associated with the acquisition of Sierra Logic,
including additional stock-based compensation, amortization of intangibles and
in-process research and development. However, as the valuation and the purchase
allocation have not been finalized for the previously announced Aarohi
acquisition, and pending the completion of the Sierra Logic acquisition, Emulex
is unable to predict the impact on its GAAP earnings per share for fiscal 2007
at this time. Given the expected timing of the closing of the acquisition, the
Non-GAAP impact is expected to be immaterial for the September quarter. For the
December quarter, the Sierra Logic acquisition is expected to contribute an
incremental $8-$10 million in revenues, and the Non-GAAP impact to diluted
earnings per share is expected to be neutral.
"The solid customer base and product portfolio that Sierra Logic brings to
Emulex enables delivery of end-to-end embedded storage solutions that address
our OEM customers' tiered storage strategies," said Bob Whitson, CEO of Sierra
Logic. "Emulex's market-leading InSpeed embedded switch products and
multi-protocol IOCs, coupled with Sierra Logic's innovative embedded bridges
and routers, along with additional technology solutions currently under
development, bring unique synergies and benefits to our mutual customers."
Sierra Logic's embedded bridges and routers enable integration of low-cost
SATA disk drives into enterprise storage systems, delivering cost-effective,
high-performance, and high-capacity storage innovations to the enterprise
market. With multiple design wins spanning a top-tier OEM customer base
including Engenio, Hitachi, Network Appliance, NEC, Sun Microsystems and
Xyratex, Sierra Logic products are in production today and recently achieved a
two-million SATA ports shipped milestone - further validating the rapid
adoption of SATA-based storage systems.
Sierra Logic comes to Emulex with a strong management team that has deep
expertise in silicon development spanning end-to-end storage systems, and a
proven track record in providing component technology to market leading storage
OEMs. Additional details and financial information related to the acquisition
will be shared during a webcast conference call scheduled for today at 2pm
Pacific time. Visit the Emulex website at www.emulex.com for details.
About Sierra Logic, Inc.
Sierra Logic, Inc. has developed a sophisticated set of silicon storage
products best described as "intelligent I/O solutions", which significantly
improve management and reliability of storage systems while significantly
lowering overall cost. Sierra Logic's focus is to provide leading-edge
solutions which ease technology transitions for enterprise storage OEMs.
Headquartered in Roseville, California, Sierra Logic can be reached at:
info@sierralogic.com, www.sierralogic.com, and 916.772.1234.
About Emulex
Emulex Corporation is the most trusted name in storage networking
connectivity. The world's leading server and storage providers rely on Emulex
award-winning HBAs, embedded storage switching and I/O controller products to
build reliable, scalable and high performance storage solutions. Emulex ranked
number 19 in the Deloitte 2005 Technology Fast 50 and is listed on the New York
Stock Exchange (NYSE:ELX). Corporate headquarters are located in Costa Mesa,
California. News releases and other information about Emulex Corporation are
available at http://www.emulex.com.
EMULEX | We network storage
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: With the exception of historical information, the statements set forth
above include forward-looking statements that involve risk and uncertainties.
These forward-looking statements include the estimate of total available market,
the effect of the Sierra Logic acquisition on the company's revenues and
earnings per share, the ability of the company to leverage Sierra Logic
technology, and anticipated customer benefits. The company wishes to caution
readers that a number of important factors could cause actual results to differ
materially from those in the forward-looking statements. Those factors include
the ability to close the transaction as proposed and to realize the anticipated
benefits on a timely basis or at all, and the company's ability to integrate the
technology, operations and personnel of Sierra Logic into its existing
operations in a timely and efficient manner. Additional factors that could
affect future results include the rapidly changing nature of technology,
evolving industry standards and frequent introductions of new products and
enhancements by competitors; fluctuation in the growth of embedded storage
component market; changes in economic conditions or changes in end-user demand
for technology solutions; fluctuations or delays in customer orders; the highly
competitive nature of the markets for Emulex's products; Emulex's ability to
gain market acceptance for its products; the company's ability to attract and
retain skilled personnel; the company's reliance on third-party suppliers. These
and other factors which could cause actual results to differ materially from
those in the forward-looking statements are also discussed in the company's
filings with the Securities and Exchange Commission, including its recent
filings on 10-K and 10-Q under the caption "Risk Factors."
This news release refers to various products and companies by their trade
names. In most, if not all, cases these designations are claimed as trademarks
or registered trademarks by their respective companies.
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