ARRIS Buys Ruckus Wireless & ICX
Switch Business for $800M
February 24, 2017
and Broadcom have entered into an agreement for ARRIS to acquire Brocade
Communication Systems Inc.'s 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. ARRIS expects the acquisition to be accretive to its Non-GAAP
earnings per share in the first 12 months.
This portfolio will expand ARRIS's leadership 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
innovative 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."
"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," added McClelland.
"ARRIS is a leader powering today's digital world, and this combination
signifies a win-win for Ruckus Wireless and ICX switching employees,
partners and customers," said Dan Rabinovitsj, Ruckus COO. "Joining the
ARRIS team will allow us to accelerate the pace of innovation and expand
our industry-leading networking portfolio, leveraging ARRIS resources
"We are pleased to announce this transaction with ARRIS, which will
allow us to focus our energy on quickly integrating Brocade's Fibre
Channel SAN business once we close the Brocade acquisition," stated
Broadcom CEO Hock Tan.
closing of the transaction is subject to regulatory approvals in various
jurisdictions and other customary closing conditions but does not
require shareholder approval by either company, is not subject to any
financing conditions, and is presently 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, previously announced on November 2, 2016 and approved by
Brocade shareholders on January 26, 2017. Broadcom presently expects to
close the Brocade acquisition in its third fiscal quarter ending July
LionTree Advisors is acting as lead financial advisor, and Troutman
Sanders LLP is acting as counsel to ARRIS on this transaction. Barclays
is acting as lead financial advisor, and Latham & Watkins LLP is acting
as counsel to Broadcom on this transaction.