Brocade is set to buy Ruckus Wireless in a deal valued at approximately $1.5 billion in a cash and stock transaction.
The acquisition will complement Brocade’s enterprise networking portfolio, adding Ruckus’ wireless products to Brocade’s networking solutions. Ruckus Wireless’ Wi-Fi products will enhance Brocade’s presence in the telecom service provider space as well.
Brocade, which competes with Cisco Systems, Juniper Networks, HPE, among others, expects the transaction to be accretive to its non-GAAP earnings by its first quarter of fiscal 2017.
Brocade and Ruckus together
#1 in storage area networking
#1 in service provider Wi-Fi
#2 in data center networking
#3 in enterprise wireless LAN
#3 in enterprise edge networking in the U.S. and EMEA
Selina Lo, CEO of Ruckus Wilress, will head Ruckus organization and report directly to Brocade CEO, Lloyd Carney.
Ruckus Wireless is expecting revenue in the range of $98 million to $101 million in the first quarter of 2016 ended March 31, 2016.
Wireless is an access technology and the combination of Brocade and Ruckus creates a new type of pure-play networking company, with solutions spanning from data center to the wireless network edge.
Large enterprises, K-12 and higher education, government, hospitality, and service providers will be focus areas for Brocade following the investment in Ruckus Wireless.
The acquisition will strengthen Brocade’s ability to pursue emerging market opportunities around 5G mobile services, Internet of Things (IoT), Smart Cities, OpenGtm technology for in-building wireless, and LTE/Wi-Fi convergence.
“This 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.