Brocade Acquires Ruckus Wireless In £1bn Networking Deal

Network equipment provider Brocade has moved to acquire Ruckus Wireless, before the ink has even dried on its DevOps deal with StackStorm last week.

Brocade said that the purchase, a cash and stock deal worth $1.5 billion (£1bn), will put the company in good stead as a pure-play networking firm, ready to meet networking requirements from the data centre to the wireless network edge.

Wireless infrastructure player Ruckus has been strong lately in gearing up for 5G mobile services, the Internet of Things and its OpenG technology for wireless, LTE, and Wi-Fi convergence.

Demand

Brocade and Ruckus both believe that the integration of Wi-Fi and the use of shared access is “critical” to meeting the growing demand for coverage and capacity needed for next-generation mobile services.

In a conference call with investors today, Brocade said that the acquisition is “an important step in Brocade’s strategic mission” to extend its focus beyond the data centre.

TechWeekEurope spoke to Ruckus COO Dan Rabinovitsj, who said: “Ruckus was not shopping itself. We’re a very successful company if you look at how much cash we’re generating. With the price that Brocade was willing to pay, the board felt this was the best deal for the shareholders. Sometimes great things just happen, and this is one of them.”

The deal was approved also approved by Brocade’s board without the assumption of any job reductions.

“They approved the deal with the running OPEX of our standalone company,” said Rabinovitsj. “Clearly there’s not a strong objective to eliminate jobs.” Ruckus currently employs just over 1,000 people.

Brocade CEO Lloyd Carney said that Ruckus is an “excellent strategic fit” and a natural extension to Brocade’s portfolio.

The transaction is also expected to boost Brocade’s earnings by the first quarter of Brocade’s 2017 financial year.

The acquisition should also boost cross-selling activities into the respective companies’ customer bases, opening up new revenue opportunities for the combined company across verticals such as large enterprises, government, hospitality, and service providers, Brocade claimed.

“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,” added Carney.

In a blog post today, Ruckus Wireless said: “For customers, once the transaction closes, you will be able to rely on the combined company for market-leading networking solutions that extend from your storage networks to your data centre, campus, and wireless edge.”

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