Acquisition Complements Brocade’s Enterprise Networking Portfolio
Brocade and Ruckus Wireless recently announced that the former has entered into a definitive agreement to acquire the latter in a cash and stock transaction. Brocade expects the transaction to be positive to its non-GAAP earnings by the first quarter of fiscal 2017.
With the acquisition, the Ruckus organization will still be led by Selina Lo, the current Ruckus CEO, who will then report directly to Lloyd Carney, Brocade CEO.
Under the terms of the agreement, Ruckus stockholders will receive US$6.45 in cash and 0.75 shares of Brocade common stock for each share of Ruckus common stock. Based on the closing price of Brocade’s stock on April 1, the transaction values Ruckus at a price of US$14.43 per common share, or approximately US$1.5 billion. Net of estimated cash acquired, the transaction value is approximately US$1.2 billion. The cash portion of the purchase price will be funded through a combination of cash on hand and new bank term loan financing.
“This strategic combination will position us to expand our addressable market and technology leadership with Ruckus’ fastgrowing wireless LAN products, and supports our vision to deliver market-leading New IP solutions that enable the network to become a platform for innovation. History shows that focused, pure-play companies often innovate faster, are more agile, and deliver better value to their customers. With the rapidly evolving requirements of the digital transformation era, we are positioning ourselves to lead where technology is headed. We believe that combining our portfolios will provide significant benefits to our customers and will enable us to accelerate our growth and value creation,” said Lloyd Carney, CEO of Brocade.
Lloyd Carney, CEO of Brocade.