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Enterprise networking vendor expands into WiFi; eyes LTE-U opportunities.
Enterprise networking vendor Brocade on Monday agreed to acquire WiFi hardware specialist Ruckus Wireless in a cash and stock deal worth US$1.2 billion (€1.05 billion).
Brocade offers a range of switches, routers, network storage and software to enterprises and carriers, while Ruckus’ portfolio includes indoor and outdoor WiFi access points, as well as WiFi controllers and gateways.
Under the transaction, Ruckus shareholders will receive $6.45 in cash and 0.75 Brocade shares for each Ruckus share. The offer values Ruckus at approximately $1.5 billion and the deal is worth $1.2 billion. Brocade said the cash portion of the acquisition will be funded using cash on hand and a new bank loan.
"This strategic combination will position us to expand our addressable market and technology leadership with Ruckus’ fast-growing wireless LAN products," said a statement from Brocade CEO Lloyd Carney.
Brocade said the acquisition of Ruckus will create cross-selling opportunities into the respective companies’ customer bases, and open up new revenue streams in several industry verticals, including education, government, hospitality and telecoms.
Brocade also sees the Ruckus deal as its gateway into the Internet of Things (IoT), smart cities and LTE-Unlicensed (LTE-U) markets.
"Brocade and Ruckus believe that the integration of WiFi and the use of shared access or lightly licensed spectrum are critical to meeting the ever-growing demand for coverage, capacity, and consistency required for next-generation mobile services. These elements are important in Brocade’s strategy to disrupt and enhance the way edge services are created and delivered," the company said.
The deal is subject to regulatory approval, and is expected to close during Brocade’s fiscal third quarter, which ends on 1 August. Ruckus CEO Selina Lo will continue to lead Ruckus, and will report directly to Carney.
"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," Lo said "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."
