Fore to buy Berkeley Networks
Fore's stock plummets on news of the deal, which could be worth $250 million and will have Berkeley become a subsidiary of Fore.
As reported, the deal, subject to regulatory approval, is expected to close before the end of September. If it is approved, Berkeley Networks will become a subsidiary of Fore and its 70 workers will join Fore's workforce, marking another example of consolidation in the networking industry.
Fore shares closed the day down 5.375 points, reaching 18.875. The stock has traded as high as 28 and as low as 13.25 during the past 52 weeks.
"The addition of Berkeley Networks to Fore Systems allows us to provide unique solutions that optimize the delivery, security, and predictability of business-critical applications," Fore chief executive Thomas Gill said in a statement. "By adding the Berkeley Networks technology to our product line, we can also offer each customer the most appropriate switching solution for their current needs."
Berkeley Networks was founded in June 1996. It is based in Milpitas, California.
Fore said it plans to take a one-time charge of between $1.80 and $2.20 per share for the quarter ended September 30 to cover a write-off of in-process research and development. It also will establish a reserve of about 5 cents per share to cover costs related to the acquisition.