BROCADE ACQUIRESRUCKUS

Ac­qui­si­tion Com­ple­ments Brocade’s En­ter­prise Net­work­ing Port­fo­lio

HWM (Malaysia) - - SMB - REPORT -

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.

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