ARRIS International is set to acquire Brocade’s Ruckus Wireless and ICX Switch business for $800 million in cash from Broadcom Communication.
ARRIS expects the acquisition to be accretive to its Non-GAAP earnings per share in the first 12 months.
The strategic acquisition of Ruckus Wireless and ICX Switch from Broadcom will be strengthening the position of ARRIS in converged wired and wireless networking technologies beyond the home into the education, public venue, enterprise, hospitality, and MDU segments.
ARRIS said it plans to establish a dedicated business unit within the company focused on wireless networking and wired switching technology to address emerging needs across a number of vertical markets. Ruckus COO Dan Rabinovitsj will head the business unit.
“The next five years will see changes as every service provider will become a wireless operator of some fashion. Enterprises and venues will upgrade broadband networks to provide new innovative value-added services and faster, more seamless internet access,” said Bruce McClelland, CEO of ARRIS.
ARRIS said its revenues in the fourth quarter 2016 of $1.759 billion (+$657 million) primarily due to the acquisition of PACE. 2016 revenues were $6.829 billion (+$2.031 billion).
“With respect to the first quarter 2017, we are estimating revenues in the range of $1.435 billion to $1.485 billion and adjusted revenues in the range of $1.440 billion to $1.490 billion,” said Bruce McClelland.
Broadcom presently expects to close the Brocade acquisition in its third fiscal quarter ending July 30, 2017.
LionTree Advisors is acting as lead financial advisor, and Troutman Sanders is acting as counsel to ARRIS on this transaction. Barclays is acting as lead financial advisor, and Latham & Watkins is acting as counsel to Broadcom on this transaction.