Brocade Purchases Ruckus Wireless for Pure-Play Networking Skills

Brocade (BRCD) announced on Monday that it had agreed to acquire Ruckus Wireless (RKUS) for $1.5 billion in a bid to solidify itself as the top pure-play networking solution provider in the channel.

The acquisition will also provide Brocade with access to Ruckus’ Wi-Fi solutions, which will enable it to foster cross-selling opportunities between the two companies’ channel partners and customers. Both companies said they do not anticipate any changes to their respective partner programs in the near future.

“History shows that focused, pure-play companies often innovate faster, are more agile, and deliver better value to their customers,” said Brocade CEO Lloyd Carney, in a statement. “With the rapidly evolving requirements of the digital transformation era, we are positioning ourselves to lead where technology is headed.”

Brocade will pay Ruckus stockholders $6.45 in cash and 0.75 shares of Brocade common stock for each share of Ruckus common stock, according to the announcement. Brocade will pay $1.2 billion in cash to purchase Ruckus Wireless, with the rest of the transaction to come from stock redistribution.

Ruckus CEO Selina Lo will continue to run the company following the acquisition. She will report to Brocade CEO Lloyd Carney. No further personnel changes were detailed in the press release.

The transaction has already been approved by both companies’ board of directors. The deal is scheduled to close during Brocade’s fiscal Q3 2016.

Brocade also increased the authorization to repurchase its common stock by $800 million to help finance the repurchase of Ruckus’s shares, the company said.

In March, Ruckus Wireless signed Securematics as the preferred distributor for the company’s Smart Wi-Fi products.