Home / Tech & Systems / Ruckus Wireless Skyrockets to New Highs after Brocade Communications Systems Proposal

Ruckus Wireless Skyrockets to New Highs after Brocade Communications Systems Proposal

Among the deals of the day, Brocade mentioned in its press release that Brocade Communications Systems, Inc. (NASDAQ:BRCD) and Ruckus Wireless (NYSE: RKUS) recently entered into a definitive agreement to acquire Ruckus Wireless, Inc. in a cash and stock transaction. The acquisition will complement Brocade’s enterprise networking portfolio, adding Ruckus’ higher-growth, and wireless products to Brocade’s market-leading networking solutions. It will also significantly strengthen Brocade’s strategic presence in the broader service provider space, with Ruckus’ market-leading Wi-Fi position. Brocade expects the transaction to be accretive to its non-GAAP earnings by its first quarter of fiscal 2017. Shares of Brocade were hammered after the news on Monday session and were down almost 13% while stock of Ruckus Wireless Inc (NYSE:RKUS) was skyrocketing 31.10% during early morning session. Brocade Communications Systems had market cap of 3.67 billion while Ruckus

Further, the acquisition would boost up Brocade’s ability to pursue emerging market opportunities around 5G mobile services, Internet of Things (IoT), Smart Cities, OpenGtm technology for in-building wireless, and LTE/Wi-Fi convergence. Brocade and Ruckus believe that the integration of Wi-Fi and the use of shared access or lightly licensed spectrum are critical to meeting the ever-growing demand for coverage, capacity, and consistency required for next-generation mobile services. These elements are important in Brocade’s strategy to disrupt and enhance the way edge services are created and delivered.

This strategic alliance would help us to grow their addressable market and technology leadership with Ruckus’ rapidly spreading wireless LAN products, and supports their idea to deliver market-leading New IP solutions that let the network to turn a platform for innovation Lloyd Carney, chief executive officer of Brocade stated. History tells that alert, pure-play firms normallu innovate quicker, are more agile, and provide better price 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.”

The acquisition would be conducted by means of an exchange proposal for all of the outstanding shares of Ruckus. The conclusion of the exchange offer is conditional to customary conditions, consisting reviews by U.S. and international antitrust controllers and the tender of a majority of the outstanding shares of Ruckus’ common stock. The firms predict the deal, which has been accepted by both firm’s boards of directors, to end in Brocade’s third fiscal quarter of 2016.


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