Emulex Gets Steal on Trebia's Carcass

Host bus adapter vendor Emulex Corp. (NYSE: ELX) has acquired the assets of IP storage network processor startup Trebia Networks Inc. for the bargain-basement price of $2 million in cash, according to documents filed with the Securities and Exchange Commission (SEC).

On Oct. 17, 2003, Emulex acquired Trebia's technology assets, which includes multiprotocol storage networking processor architectures and high-performance TCP offload engines (TOEs), Emulex disclosed in a 10-Q filing last week. The purchase price was $2 million in cash, with $500,000 of that amount placed in an escrow account for at least 90 days, the company's filing said.

In August, Byte and Switch reported that Emulex was the leading candidate to acquire Trebia's intellectual property. The Acton, Mass., startup, which was founded in July 2000, ceased operations that month and laid off most of its 38 employees (see Trebia Croaks).

The deal is an outright steal for Emulex, considering that investors had poured more than $40 million into Trebia, whose chips are designed to accelerate IP storage networking traffic (see Trebia Gets Second Wind).

Trebia's investors included Raza Foundries, Allianz of America Inc., Atlas Venture, BancBoston Ventures, Deutsche Banc Alex Brown LLC, Kodiak Venture Partners, and VantagePoint Venture Partners (see Trebia's $40M Secret).Several sources said that Trebia's VCs -- who ousted most of the original senior management team earlier this year -- had been shopping the company around for at least the past few months (see Trebia Taps Stroh as CEO, Is Trebia Up for Sale?, and Trebia Ousts CEO).

What remains a mystery is what Emulex intends to do with the Trebia technology. (Emulex did not respond to requests for more information by press time.)

Before it folded up shop, Trebia claimed that its silicon was able to provide the fastest iSCSI performance in the industry, with 245,000 I/O operations per second (IOPS) across two ports and 452-Mbyte/s throughput (see Trebia Trumpets iSCSI Test).

Of course, it's likely that Emulex will get a better return on its investment in Trebia's remains than it got from another IP storage networking startup it acquired. In December 2000, Emulex acquired Giganet Inc. in a deal worth about $645 million in stock -- and for all practical purposes, Emulex has never generated any revenue from the deal (see Storage Deals Hit by Deflation). According to an ex-Giganet employee, Emulex last year put the IP product line "on the shelf," as it waited for the iSCSI market to materialize.

Separately this week, Emulex completed its acquisition of Fibre Channel switch vendor Vixel Corp. (Nasdaq: VIXL), for which it paid about $310 million in cash (see Emulex Completes Vixel Acquisition and Emulex Drops Cash for Vixel).Todd Spangler, US Editor, Byte and Switch