(EMAILWIRE.COM, December 08, 2000 ) Emulex Corporation (NASDAQ: EMLX), the world's leading supplier of Fibre Channel host adapters, today announced a definitive agreement to acquire privately-held Giganet, Inc. of Concord, Mass., a leading developer of Virtual Interface (VI)-based IP networking solutions. Upon completion of the transaction, Giganet will become the IP Networking Group of Emulex, and Neil Ferris, Giganet President and CEO, will assume a seat on Emulex's board of directors. The combined companies will offer the industry a wide range of storage networking technologies, enabling OEM customers to go to one source for best in class Fibre Channel and IP-based storage networking host bus adapters (HBAs). Under terms of the agreement, Emulex will acquire Giganet, Inc. for approximately 4.0 million shares in common stock and assumed options (before giving effect to Emulex's recently announced two-for-one stock split). Based on Emulex's December 6, 2000 closing stock price, the transaction has a current aggregate value of approximately $645 million. The boards of directors of each company have approved the acquisition, which is expected to close during the third fiscal quarter ending April 1, 2001, subject to customary closing conditions and regulatory approvals. The acquisition will be accounted for using the purchase method of accounting. Upon completion of the transaction, Emulex expects to record a one-time non-cash charge against earnings of approximately $10 million for purchased in-process research and development. Excluding non-cash acquisition-related charges, the acquisition is expected to be non-dilutive to pro-forma earnings per share for the fiscal year ending July 1, 2001. "The acquisition of Giganet extends Emulex's leadership position in storage networking host bus adapters from Fibre Channel into the IP arena," said Paul Folino, President and CEO of Emulex. "As a result of this acquisition, SAN and NAS OEMs will be able to obtain best-of-breed storage networking host bus adapters spanning both Fibre Channel and Ethernet, all from a single supplier. Furthermore, we expect Giganet's technology leadership in VI architectures to provide critical time-to-market benefits for Emulex customers, as VI emerges as a core enabling technology for higher speed gigabit networking architectures." "Emulex's market leadership in Fibre Channel SAN connectivity strongly complements Giganet's strategic focus on IP-based storage networking," said Neil Ferris, President and CEO of Giganet. "With the pace of bandwidth expansion accelerating, and VI-enabled applications now emerging across the NAS and database sectors, we believe the market is poised for rapid adoption of VI-enabled host bus adapters. For example, Giganet's recently-announced design win from Network Appliance for its upcoming family of VI over IP host bus adapters promises to set new high performance benchmarks in the network attached storage industry. We expect employees and customers alike to benefit from the collective technology leadership and financial strength of this combination." With demand for Emulex's Fibre Channel HBAs running ahead of expectations, Emulex now anticipates sequential growth of 28-30% in Fibre Channel revenue for its second quarter ending December 2000, up from earlier expectations of 20-25%. "With the incremental revenues from our Fibre Channel business, and expanding Fibre Channel backlog, Emulex is well positioned to maintain its 30% operating margin objectives on a pro-forma basis, excluding non-cash acquisition-related charges relating to the Giganet acquisition that we expect to incur in our third fiscal quarter, ending April 1," noted Mike Rockenbach, chief financial officer of Emulex. "Based on market research expectations of 10-12% long-term quarterly sequential growth for the fibre channel HBA industry, Emulex now believes that it can achieve revenue of approximately $285 million and $1.48 in pro-forma earnings per share for the fiscal year ending July 1, 2001, excluding acquisition-related charges. A webcast that will outline the Giganet acquisition has been scheduled for 2:00 p.m. Pacific standard time today on December 7, 2000. Interested participants may access the webcast, which will include a simulcast slide presentation, via Emulex's web site at www.emulex.com. The webcast will be archived on the Emulex website. About Emulex Emulex Corporation is a leading designer, developer and supplier of a broad line of Fibre Channel host adapters, hubs, ASICs and software products that provide connectivity solutions for Fibre Channel SANs, network attached storage (NAS) and RAID. The Company's products are based on internally developed ASIC technology, and are deployable across a variety of SAN configurations, system buses and operating systems, enhancing data flow between computers and peripherals. Emulex's products offer customers the unique combination of critical reliability, scalability, and high performance, and can be customized for mission-critical server and storage system applications. Emulex products have been selected by the world's leading server and storage providers, including Compaq, EMC, Fujitsu-Siemens, Groupe Bull, Hewlett-Packard, Hitachi Data Systems, IBM, NEC, and Unisys. In addition, Emulex includes industry leaders Brocade, Intel, McDATA, Microsoft, Legato and VERITAS among its strategic partners. Emulex markets to OEMs and end users through its own worldwide selling organization, as well as two-tier distribution partners. Corporate headquarters are located in Costa Mesa, California. News releases and other information about Emulex Corporation are available via the Internet at http://www.emulex.com. EMULEX | We Network Storage This news release refers to various products and companies by their trade names. In most, if not all, cases these designations are claimed as trademarks or registered trademarks by their respective companies. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. The company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the following: the fact that Emulex's and Giganet's markets are characterized by rapidly changing technology, evolving industry standards and frequent introductions of new products and enhancements, and the combined companies' ability to respond to such changes; the fact that the fibre channel and IP market are at early stages of development; the fact that Giganet's VI/IP products remain in the development stage and are subject to significant technical, competitive and market acceptance risks; the fact that the acquisition of Giganet is subject to a number of customary closing conditions which could prevent or delay the closing of the pending acquisition; the highly competitive nature of the markets for Emulex's and Giganet's products; the company's ability to attract and retain skilled personnel; the company's reliance on third-party suppliers for components used in the company's products and on manufacturing subcontractors that assemble and distribute the company's products; the company's reliance on certain OEMs, distributors and key customers; and potential fluctuations in the company's future effective tax rate. These and other factors which could cause actual results to differ materially from those in the forward-looking statements are also discussed in the company's filings with the Securities and Exchange Commission, including its recent filings on Form 10-K and Form 10-Q. -------------------Produced for Emulex CorporationInvestor Contact: Mike Rockenbach CFO, Vice President of Finance (714) 513-8213 mike.rockenbach@emulex.com Press Contact: Robin Schnug Public Relations Manager (714) 513-8152 robin.schnug@emulex.com -------------------

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