Broadcom bids for Gadzoox assets

The chipmaker is looking to snap up the storage networking maker's technology and product line for about $8.5 million, a Gadzoox Networks representative says.

Chipmaker Broadcom has made a bid to acquire the assets of troubled storage-networking maker Gadzoox Networks, a Gadzoox representative told CNET News.com on Thursday.

The Irvine, Calif.-based maker of communications chips has made a bid in bankruptcy court to acquire Gadzoox's technology and product line for about $8.5 million, the Gadzoox representative said.

The company, which specializes in Fibre Channel technology, enjoyed a blockbuster initial stock offering in 1999, but has struggled in recent years to keep up with competitors such as Emulex and Qlogic. Gadzoox, which was valued at nearly $2 billion after its first day of trading in 1999, said it expects its existing common stock to have no value once its bankruptcy is completed.

Any deal would require approval of the bankruptcy court, which will seek other offers through mid-February, according to the Gadzoox representative. A number of companies have expressed interest in the company, the representative added. Gadzoox filed for bankruptcy protection last August.

A Broadcom representative did not return calls seeking comment.

Despite its bankruptcy filing status, Gadzoox reported its first profitable quarter Thursday, posting a $70,000 profit on revenue of $4.9 million. The company has about 50 employees.

Broadcom's bid comes amid the departure of its CEO and co-founder, Henry Nicholas, who abruptly resigned last week, citing a pending divorce.