ARRIS International and Broadcom have struck a slightly complicated deal under which Broadcom – which is currently in the process of buying Brocade Communication Systems – will sell off Brocade’s Ruckus Wireless and ICX switch business to ARRIS for cash consideration of $800 million once the Brocade acquisition is complete.
Put another way, ARRIS is buying Ruckus and the Brocade ICX Switch portfolio from Broadcom for $800 million in cash as soon as Broadcom finishes buying their current owner, Brocade.
ARRIS says the portfolio will expand its 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.
“Joining the ARRIS team will allow us to accelerate the pace of innovation and expand our industry-leading networking portfolio, leveraging ARRIS resources and scale,” Rabinovitsj said.
“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, said ARRIS CEO Bruce McClelland. “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 said the transaction is subject to regulatory approvals in various jurisdictions and other customary closing conditions but does not require shareholder approval by either company, and is not subject to any financing conditions.
The deal is currently expected to close approximately one month after the closing of Broadcom’s acquisition of Brocade, which was announced in November last year and approved by Brocade shareholders in January. Broadcom presently expects to close the Brocade acquisition in its third fiscal quarter ending July 30, 2017.
Broadcom CEO Hock Tan said selling off Ruckus and Brocade’s ICX business will allow the company to focus its energy on quickly integrating Brocade’s Fibre Channel SAN business.