Acquisition Brings Back Sun Microsystems Founder

SAN JOSE, Calif. (AP) -- Sun Microsystems Inc. is buying a privately held firm in a deal that will bring one of Sun's founders back to the company he helped form more than 20 years ago.

Andy Bechtolsheim, who left Sun in 1995 to pursue other business opportunities, currently leads Kealia Inc., which develops advanced server technologies. Sun's acquisition of Kealia is expected to close later this year, the companies said Tuesday. Sun spokeswoman May Petry declined to disclose terms of the deal.

"It is great to have Andy back home at Sun,'' said Scott McNealy, Sun's chief executive and co-founder. "We started the company together while we were at Stanford University over 20 years ago and both of us could not be more excited about working together again.''

Once the acquisition clears regulatory hurdles, Kealia will become a unit of Sun's Volume Systems Products group. Bechtolsheim will become senior vice president and chief architect within that group.

Bechtolsheim, 48, also will be a member of Sun's executive management team.

"I am very excited about being back at Sun and working with Sun to bring the next generation of volume servers, desktops and storage products to market more quickly,'' Bechtolsheim said.

After leaving Sun, Bechtolsheim formed a startup called Granite Systems. It was sold to networking giant Cisco Systems Inc. for $200 million in 1996. He left Cisco late last year.

Little is known about Kealia's technology. The company's Web site lists its Palo Alto address and driving directions to its offices.

Bechtolsheim's return to Sun comes less than a year after the departure of another of its founders, chief scientist Bill Joy.

Sun, once a darling of Silicon Valley, has been struggling as corporate spending on technology declined and competition from its rivals increased.

Also Tuesday, Fitch Ratings downgraded Sun's senior unsecured debt, saying it believes the company will take longer than expected to achieve sustained profitability.

Sun shares rose 2 cents to close at $5.54 Tuesday on the Nasdaq Stock Market.