McDATA has taken a clear leadership position as the only company offering storage network management software that provides visibility and discovery in a multi-vendor environment, said Jack McDonnell, Chairman and CEO, McDATA. The acquisition of SANavigator not only strengthens our current software suite but underscores our commitment to provide customers complete, best-in-class storage networking solutions.

SANavigator’s software products and McDATA’s storage networking solutions address the needs of the storage network management market and simplify the design, installation, management and growth of open storage networks. The asset acquisition supports McDATA’s recently announced Enterprise Solutions ArchitectureÔ and its commitment to bring customers integrated software solutions that simplify and optimize their Core-to-Edge enterprise storage networks.

As previously indicated, the company expects to incur $2.5 – $3.0 million of one-time costs associated with the asset acquisition, the majority of which are expected to occur in the third quarter of 2001. In addition, the company commissioned and received an appraisal of the SANavigator assets from an independent valuation firm. Based on this appraisal and pursuant to the new FAS 141 and 142 rules pertaining to business combinations and the treatment of goodwill and other intangible assets, the company expects to record a non-cash charge of approximately $0.01 per share in the fourth quarter of 2001, and $0.02 per share in full year 2002, primarily related to the amortization of intangible assets related to the acquisition. The company also expects to record a one-time, non-cash charge of approximately $7.2 million in the third quarter of 2001 related to the portion of the purchase price allocated to in process R&D. In process R&D is primarily comprised of future software product enhancements that are under development.

SANavigator, Inc. will continue to be based in San Jose, Calif., and its existing product SANavigator software is available to customers worldwide through SANavigator, Inc. and McDATA.

SOURCE: COMPANY PRESS RELEASE