04 Apr 2016

Brocade to acquire Ruckus Wireless for £840 million

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.