Brocade is set to enter the growing wireless networking market thanks to the acquisition of Ruckus Wireless. Announced today, the deal has an estimated value of $1.5 billion and is a cash and stock deal that is expected to close in Brocade's third fiscal quarter of 2016.
Under the proposed terms of the deal, Ruckus shareholders will receive 0.75 shares of Brocade common stock and $6.45 in cash for each share of Ruckus common stock.
"This strategic combination will position us to expand our addressable market and technology leadership with Ruckus' fast-growing wireless LAN products, and supports our vision to deliver market-leading New IP solutions that enable the network to become a platform for innovation," Lloyd Carney, chief executive officer of Brocade, said in a statement. "We believe that combining our portfolios will provide significant benefits to our customers and will enable us to accelerate our growth and value creation."
Selina Lo, president and CEO of Ruckus, is also very optimistic about the deal, especially since the two companies portfolios are complementary, without substantial overlap.
"We operate in adjacent segments of the larger networking market with a number of common customers for our complementary products, and have a successful track record of working together," Lo said in a statement. "We are excited for the opportunity to join the Brocade team and to jointly deliver innovative, value-added solutions to our enterprise and service provider customers."
The acquisition of Ruckus isn't the first time that Brocade has made a major acquisition to enter a core area of the networking market. In 2008, Brocade was mostly a storage networking (SAN) vendor. That changed with the company's $3 billion acquisition of Foundry Networks. The former Foundry Networks portfolio became the base of Brocade's entire IP networking portfolio.
In 2012, Brocade entered the Software Defined Networking (SDN) market via the acquisition of SDN vendor Vyatta.
For the wireless market, the acquisition of Ruckus by Brocade is yet another in a long string of market consolidation moves that have occurred in recent years. Among the most recent was Hewlett Packard's acquisition of Aruba Networks for $2.7 billion in 2015.
Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.