SAN JOSE, Calif., April 4, 2016 /PRNewswire/ -- Brocade (NASDAQ:
BRCD) and Ruckus Wireless (NYSE: RKUS) today announced that Brocade
has 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, 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. The Ruckus organization will be
led by current Ruckus CEO, Selina
Lo, and report directly to Brocade CEO, Lloyd Carney.
Under the terms of the agreement, Ruckus stockholders will
receive $6.45 in cash and 0.75 shares
of Brocade common stock for each share of Ruckus common stock.
Based on the closing price of Brocade's stock on April 1, 2016, the transaction values Ruckus at a
price of $14.43 per common share, or
approximately $1.5 billion, and may
fluctuate until close. Net of estimated cash acquired, the
transaction value is approximately $1.2
billion.The cash portion of the purchase price will be
funded through a combination of cash on hand and new bank term loan
financing.
As companies move to digitize their business, they need an
underlying network architecture that supports business agility.
This New IP architecture enables the network to become a platform
for innovation and for developing, delivering, and securing new
applications. Wireless is a critical access technology and the
combination of Brocade and Ruckus creates a new type of pure-play
networking company, with solutions spanning from the heart of the
data center to the wireless network edge. In addition, after close,
the acquisition is expected to accelerate cross-selling activities
into the respective companies' partner and customer bases, opening
up new revenue opportunities for the combined company across a
variety of verticals, including large enterprises, K-12 and higher
education, government, hospitality, and service providers.
Further, the acquisition will strengthen 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 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," said Lloyd Carney, chief executive officer of
Brocade. "History shows that focused, pure-play companies often
innovate faster, are more agile, and deliver better value 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 combination of our two companies will create an exciting
new thought leader in networking and significant opportunities for
our stakeholders to participate in the combined company's future
growth potential," said Selina Lo,
president and CEO of Ruckus. "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. 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 will be conducted by means of an exchange offer
for all of the outstanding shares of Ruckus. The completion of the
exchange offer is subject to customary conditions, including
reviews by U.S. and international antitrust regulators and the
tender of a majority of the outstanding shares of Ruckus' common
stock. The companies expect the transaction, which has been
approved by both companies' boards of directors, to close in
Brocade's third fiscal quarter of 2016.
Brocade Increases Stock Repurchase Authorization by
$800 Million
Brocade also announced today that its Board of Directors has
increased the authorization to repurchase its common stock under
its existing stock repurchase program by $800 million, bringing the total remaining amount
authorized under the program to approximately $1.7 billion. This increase is intended to
facilitate the repurchase of all shares issued in conjunction with
the Ruckus acquisition. While Brocade has targeted the repurchase
of all those shares within six months of the closing of the
acquisition, the timing and amounts of these acquisition-related
repurchases will be determined by Brocade, based on the trading
price of Brocade's common stock, general business and market
conditions, and other factors. The repurchases may be made in the
open market or in privately negotiated transactions.
Webcast Information
The companies will hold a joint webcast today at 5:30 a.m. PT (8:30 a.m.
ET) to discuss this announcement. The webcast can be
accessed via Brocade's IR website at http://www.brcd.com/events.cfm
and Ruckus' IR website at http://investors.ruckuswireless.com. A
replay of the webcast will be available for 90 days following the
call at http://www.brcd.com/events.cfm and
http://investors.ruckuswireless.com.
About Brocade
Brocade (NASDAQ: BRCD) networking solutions help the world's
leading organizations turn their networks into platforms for
business innovation. With solutions spanning public and private
data centers to the enterprise edge, Brocade is leading the
industry in its transition to the New IP network infrastructures
required for today's era of digital business. (www.brocade.com)
About Ruckus
Ruckus delivers simply better wireless for more than 65,300
enterprise, service provider, government and small business
customers worldwide. The company is focused on technology
innovation, partner ecosystems and customer service — yielding the
best possible wireless experience for the most challenging indoor
and outdoor environments. Its Smart Wi-Fi platform delivers
scalable, high-performance Wi-Fi with simplified control and
management for on-premise and cloud-based Wi-Fi deployments, along
with new services for secure on-boarding, policy management,
location services and analytics that enable new business
opportunities.
Additional Information and Where to Find It
The exchange offer referenced in this communication has not yet
commenced. This communication is for informational purposes
only and is neither an offer to purchase nor a solicitation of an
offer to sell shares, nor is it a substitute for any offer
materials that Brocade Communications Systems, Inc. ("Brocade") and
its acquisition subsidiary will file with the U.S. Securities and
Exchange Commission ("SEC"). At the time the exchange offer
is commenced, Brocade and its acquisition subsidiary will file a
tender offer statement on Schedule TO and may later file amendments
thereto, Brocade will file a registration statement on
Form S-4 and may later file amendments thereto, and
Ruckus will file a Solicitation/Recommendation Statement on
Schedule 14D-9 and may later file amendments thereto, in each case,
with the SEC with respect to the exchange offer. Brocade and
Ruckus may also file other documents with the SEC regarding the
transaction. THE EXCHANGE OFFER MATERIALS (INCLUDING AN OFFER
TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER
EXCHANGE OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION
STATEMENT WILL CONTAIN IMPORTANT INFORMATION. RUCKUS STOCKHOLDERS
ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT
HOLDERS OF RUCKUS SECURITIES SHOULD CONSIDER BEFORE MAKING ANY
DECISION REGARDING EXCHANGING THEIR SECURITIES. The Offer to
Exchange, the related Letter of Transmittal and certain other
exchange offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to
all holders of Ruckus stock at no expense to them. The exchange
offer materials and the Solicitation/Recommendation Statement
will be made available for free at the SEC's website at
www.sec.gov. Additional copies may be obtained for free by
contacting Brocade's Investor Relations department at (408)
333-0233 or at ir@Brocade.com. Additional copies of
the Solicitation/Recommendation Statement may be obtained for
free by contacting Ruckus' Investor Relations department at
408-469-4659 or at ir@ruckuswireless.com.
In addition to the Offer to Exchange, the related Letter of
Transmittal and certain other exchange offer documents, as well as
the Solicitation/Recommendation Statement, Brocade and Ruckus file
annual, quarterly and current reports and other information with
the SEC. You may read and copy any reports or other information
filed by Brocade and Ruckus at the SEC public reference room at 100
F Street, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Brocade's and Ruckus'
filings with the SEC are also available to the public from
commercial document-retrieval services and at the website
maintained by the SEC at http://www.sec.gov.
Forward-Looking Statements
This press release contains forward-looking statements that
involve a number of risks, uncertainties and assumptions that may
cause actual results to differ significantly. All statements
other than statements of historical fact are statements that could
be deemed forward-looking statements, including but not limited to
the expected benefits and costs of the proposed transaction;
management plans relating to the proposed transaction; the expected
timing of the completion of the proposed transaction; statements of
the plans, strategies and objectives of Brocade and Ruckus for
future operations; statements concerning the expected development,
performance, market share or competitive performance relating to
products and services of Brocade, Ruckus or the combined company;
statements about expected synergies and market opportunities;
statements regarding anticipated operational and financial results;
statements regarding the timing and amount of future share
repurchases; any statements of expectation or belief; and any
statements of assumptions underlying any of the foregoing.
Risks, uncertainties and assumptions include, but are not
limited to, the ability of the parties to consummate the proposed
transaction on a timely basis or at all; the satisfaction of the
conditions precedent to consummation of the proposed transaction,
including the condition that a majority of Ruckus' shares be
validly tendered into the exchange offer; the ability to secure
regulatory approvals on the terms expected at all or in a timely
manner; the failure of Brocade to obtain the financing described
herein; the possibility that the expected benefits of the proposed
transaction may not materialize as expected; the possibility that,
prior to the completion of the proposed transaction, Ruckus'
business may not perform as expected due to transaction-related
uncertainty or other factors; the ability of Brocade to
successfully integrate Ruckus' operations; the ability of Brocade
to achieve its plans, forecasts and other expectations with respect
to Ruckus' business after the completion of the proposed
transaction and realize expected synergies; business disruptions
following the proposed transaction; and other risks described in
Brocade's and Ruckus' filings with the SEC, such as their
respective Quarterly Reports on Form 10-Q and Annual Reports on
Form 10-K. The forward-looking statements included in this
press release are made only as of the date hereof, and Brocade and
Ruckus expressly assume no obligation to update any such
forward-looking statements whether as the result of new
developments or otherwise.
© 2016 Brocade Communications Systems, Inc. All Rights
Reserved.
Brocade, Brocade Assurance, the B-wing symbol, ClearLink,
DCX, Fabric OS, HyperEdge, ICX, MLX, MyBrocade, OpenScript, VCS,
VDX, Vplane, and Vyatta are registered trademarks, and Fabric
Vision is a trademark of Brocade Communications Systems, Inc., in
the United States and/or in other
countries. Other brands, products, or service names mentioned may
be trademarks of others.
Brocade
Contacts
|
|
Media
Relations
|
Investor
Relations
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Ed Graczyk
|
Michael
Iburg
|
408.333.1836
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408.333.0233
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egraczyk@brocade.com
|
miburg@brocade.com
|
|
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Ruckus
Contacts
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Media
Relations
|
Investor
Relations
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Laurie
Falconer
|
Kim Watkins,
CFA
|
408.724.0741
|
408.469.4659
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laurie.falconer@ruckuswireless.com
|
kim.watkins@ruckuswireless.com
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SOURCE Ruckus Wireless; Brocade