ARRIS (NASDAQ:ARRS) and Broadcom (NASDAQ:AVGO) have entered into an agreement for ARRIS to acquire Brocade Communication Systems' Ruckus Wireless and ICX Switch business for cash consideration of $800 million, plus the additional cost of unvested employee stock awards, following the closing of Broadcom's acquisition of Brocade.
The transaction is expected to close approximately one month following the closing of Broadcom's acquisition of Brocade. The transaction is contingent on Broadcom closing its acquisition of Brocade, announced on Nov. 2. Broadcom expects to close the Brocade acquisition in its third fiscal quarter ending July 30.
The deal is intended to enhance ARRIS' position in converged wired and wireless networking technologies beyond the home into the education, public venue, enterprise, hospitality, and MDU segments. ARRIS plans to establish a dedicated business unit within the company focused on wireless networking and wired switching technology to address evolving and emerging needs across a number of vertical markets. The business unit will be led by current Ruckus COO Dan Rabinovitsj.
"We are building upon our successful history of making investments that significantly grow our business and create value for our customers, employees, shareholders and partners," said Bruce McClelland, ARRIS CEO. "Driven by ever-growing demand for high-speed, reliable, and effortless connectivity, service providers and enterprises will continually invest in their wired and wireless networks. The next five years will see exciting changes as every service provider will become a wireless operator of some fashion. Enterprises and venues will upgrade their broadband networks to provide new innovative value-added services and faster, more seamless internet access."
ARRIS has marketed Ruckus WiFi products since 2011, including both public/outdoor hotspots and access points and residential routers. Some of Ruckus' WiFi deployments include the city of San Francisco, Time Warner Cable (now Charter), and Suddenlink (now Altice).
"We have a history of partnering with Ruckus and the talented employees that created this powerful brand and platform. We are excited to welcome about 1,600 new employees and an extensive network of enterprise channel partners to the ARRIS family," McClelland said.