Brocade Communications to acquire Ruckus Wireless
05 Apr 2016
Brocade Communications yesterday said it would acquire Ruckus Wireless in a $1.5-billion deal that gave it "an onramp" from the wireless edge of the modern network to Brocade's products in the corporate datacentre.
"We're positioning ourselves to lead where technology is headed," said Brocade CEO Lloyd Carney in a statement.
That meant the wireless, the mobile edge of modern corporate networks, as companies moved some or all of their operations to the cloud and users increasingly accessed them from mobile devices.
With the news, shares of Sunnyvale-based Ruckus, a global supplier of advanced wireless devices, vaulted 32 per cent to $13.20 in trading yesterday, while Brocade's retreated 14 per cent to $9.14.
Excluding cash, the deal was valued at approximately $1.2-billion and was a major move by Brocade, of San Jose, to deal with a fast-changing marketplace.
Brocade and Ruckus had been jointly working on various projects for the past two years and had separately provided the networking switches and wireless hookups for the city of San Jose, and recently for Sacramento's Golden 1 Center arena.
"That's when we realized there's a lot of complementarity" between the two companies' products, said Ruckus CEO Selina Lo, mercurynews.com reported. "We looked at what's coming down the road and saw that an ability to offer a complete solution is very attractive."
According to commentators, as both companies were already working to virtualise their respective networking gear, the deal could help the merged entity accelerate the virtualisation of networks from the core data centre through the network's edge.
A virtualised network combined hardware and software into a unit that could be managed and administered via software - so much so that capability and system changes could be accomplished through re-programming, not massive hardware updates.
The transaction would see Ruckus shareholders get $6.45 in cash and 0.75 shares of Brocade common stock, Brocade said in release.
