San Jose, Calif-based Brocade Communications Systems has a new man in the top spot. Tech industry veteran Lloyd Carney has taken the CEO reins and also joined the data and storage networking company's board of directors. He succeeds Michael Klayko, who has served as CEO since 2005.
Industry watchers say part of Carney's challenge as CEO will be helping Brocade pursue a more software oriented strategy, competing with Cisco, HP and other leaders that are moving toward software-defined networking, after decades of focus on the hardware.
Brocade's extensive line of networking equipment includes enterprise Ethernet switches, WAN routers, SAN switches, application delivery controllers, network security appliances, Ethernet/storage network adapters and PHY transceivers.
While some industry reports have speculated about Brocade being positioned for sale, this week's announcements seem to indicate otherwise.
David House, chairman of Brocade's board of directors, said, "The board believes that Mr. Carney is the ideal leader to take Brocade to the next level," acknowledging his extensive experience and his "relentless passion for driving innovation and operational excellence."
Micromuse, Juniper, Nortel, Bay Networks
Carney, 50, has nearly 30 years' experience in the high-tech industry. His career includes a number of senior leadership positions at networking and semiconductor companies. Most recently, Carney was CEO and board member of Xsigo Systems, a privately held company specializing in data center virtualization. There he positioned the company to leverage emerging technology opportunities including cloud computing and software-defined networking.
Before his tenure at Xsigo Systems, Carney served as CEO of Micromuse, which specialized in network management software and later became an integral part of the IBM Tivoli framework. Carney has also held key senior leadership positions at major networking companies including a stint as COO at Juniper Networks and president of Nortel Networks' multibillion-dollar Core IP, Wireless Internet and Enterprise divisions. Carney also served at Bay Networks as the executive vice president and general manager of the Enterprise Business Group, the company's largest business unit.
"I believe Brocade is poised to leverage its heritage of strong innovation and significantly disrupt the status quo in the data-networking industry," Carney said. "There are profound changes happening across high tech today and Brocade has a great opportunity to lead that transformation through differentiated products and customer focus. Success here will accelerate profitable growth for our company and drive further value for our shareholders."
Speaking of value, Brocade also announced it is buying back debt and refinancing it at a lower interest rate. The company said it is pricing its $300 million in 4.625 percent senior notes to mature in 2023 at an issue price of 100 percent of the principal. Brocade will offer the notes in a private placement to "qualified institutional buyers" in the U.S. as required by the Securities and Exchange Commission. Sale of the notes is expected to close Tuesday.
Brocade intends to use the net proceeds of the offering, together with cash on hand, to redeem all of Brocade's outstanding 6.625 percent senior secured notes due 2018, including the payment of accrued and unpaid interest on the 2018 notes to but excluding the date of redemption and the applicable premium and expenses associated with the redemption.