The latest addition to the series of efforts by the network-equipment companies to expand their Wi-Fi offerings is the acquisition of Ruckus Wireless Inc. by the network gear maker Brocade Communications Systems Inc. The $1.5 billion deal, will enhance Brocade’s enterprise networking portfolio, adding Ruckus’ wireless products to Brocade’s networking solutions.
According to the terms of the deal, Ruckus stockholders will receive $6.45 in cash and 0.75 shares of Brocade common stock for each share of Ruckus common stock. After the deal is closed, Ruckus’ current CEO, Selina Lo will continue to lead Ruckus organization, and will report directly to Brocade CEO, Lloyd Carney.
According to Lloyd Carney, the deal will help Brocade compete with the larger companies without worries with the expanded product lines. “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,” he said.
“We believe that combining our portfolios will provide significant benefits to our customers and will enable us to accelerate our growth and value creation.”
The companies expect the transaction to close in Brocade’s third fiscal quarter of 2016. The deal has to be validated by U.S. and international antitrust regulators and the tender of a majority of the outstanding shares of Ruckus’ common stock for closing.
Brocade said it had increased its stock-repurchase program by $800 million. This will bring the total remaining amount authorized under the program to about $1.7 billion.
Recently, similar deals are on the rise due to the growing popularity of Wi-Fi. In 2012, Cisco agreed to buy Meraki Inc. for $1.2 billion. In 2015, Hewlett-Packard Co. inked a deal to buy Aruba Networks Inc. for about $3 billion.