Brocade to acquire Ruckus Wireless for £840 million
Written by: Sam Fenwick | Published:

Brocade and Ruckus Wireless have announced today (4 April) that Brocade has agreed to acquire Ruckus Wireless. The acquisition is expected to complement Brocade’s enterprise networking portfolio and strengthen Brocade’s presence in the service provider space due to Ruckus’ strong presence in the Wi-Fi market. The two companies anticipate that the transaction will close in Brocade’s third fiscal quarter of 2016.

Ruckus’ shareholders will receive $6.45 in cash and 0.75 shares of Brocade common stock. The transaction values Ruckus at roughly $1.5 billion, based on the closing price of Brocade’s stock on 1 April ($14.43/common share). The deal is estimated at approximately $1.2 billion (roughly £839.76 million), after accounting for Ruckus’ cash reserves.

Brocade expects the acquisition to add to its non-GAAP earning by the first quarter of its 2017 fiscal year. Ruckus will continue to be led by its CEO, Selina Lo, who will report directly to Brocade’s CEO, Lloyd Carney.

The acquisition is also expected by Brocade to allow cross-selling opportunities between the two companies’ partner and company bases, creating new opportunities for combined company across verticals such as large enterprise higher education, government, hospitality and service providers. It is also expected to aid Brocade with its pursuit of emergency market opportunities around 5G mobile services, IoT, smart cities, OpenG technology for in-building wireless connectivity and LTE/Wi-Fi convergence. Both companies believe that the integration of Wi-Fi with shared access or lightly licensed spectrum is critical to meeting the needs of next-generation mobile services.

“This strategic combination will position us to expand our addressable market and technology leadership with Ruckus’ fast-growing wireless LAN products, and supports our vision to deliver market-leading New IP solutions that enable the network to become a platform for innovation,” said Lloyd Carney, chief executive officer of Brocade (pictured right). “History shows that focused, pure-play companies often innovate faster, are more agile, and deliver better value to their customers. With the rapidly evolving requirements of the digital transformation era, we are positioning ourselves to lead where technology is headed. We believe that combining our portfolios will provide significant benefits to our customers and will enable us to accelerate our growth and value creation."

"The combination of our two companies will create an exciting new thought leader in networking and significant opportunities for our stakeholders to participate in the combined company's future growth potential,” said Selina Lo, president and CEO of Ruckus. "We operate in adjacent segments of the larger networking market with a number of common customers for our complementary products, and have a successful track record of working together. We are excited for the opportunity to join the Brocade team and to jointly deliver innovative, value-added solutions to our enterprise and service provider customers.”

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