Brocade Communications has announced an agreement to acquire Wi-Fi equipment maker Ruckus Wireless in a cash and stock deal worth around USD 1.5 billion. In a joint statement, Brocade and Ruckus said the transaction had been approved by both companies' boards of directors and Ruckus shareholders will receive USD 6.45 in cash and 0.75 shares of Brocade common stock for each share of Ruckus. Brocade said the acquisition will serve to complement its enterprise networking portfolio, allowing it to build a networking company for the digital transformation era. “The combination of Brocade and Ruckus creates a new type of pure-play networking company, with solutions spanning from the heart of the data centre to the wireless network edge,” said Brocade.
The companies aim to close the transaction in Brocade's third fiscal quarter of 2016, with the combined entity expected to be the leading company in storage area networking and service provider Wi-Fi in the US and EMEA, as well as the number 2 in data centre networking. The Ruckus organisation will be led by current Ruckus CEO, Selina Lo, who will report directly to Brocade CEO, Lloyd Carney.
Brocade also announced that its board had agreed to increase stock repurchase authorisation by USD 800 million to around USD 1.7 billion with a view to facilitating the repurchase of all shares issued in conjunction with the Ruckus acquisition.
Separately, Ruckus updated its guidance for the first quarter of 2016, ending 31 March, predicting total revenue in the range of USD 98 million to USD 101 million, compared to the previous forecast of USD 96 million to USD 101 million.
