Brocade Sells Some Networking Assets to ARRIS for $800M

Fire-sale of assets includes Ruckus Wireless technology that Brocade paid $1.5B for in April 2016.

By Sean Michael Kerner | Posted Feb 22, 2017
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Brocade announced a deal today that is likely to have a lot of investors scratching their heads in confusion. Brocade is currently in the process of being acquired by Broadcom for $5.9 billion, but first Brocade has pledged to sell off its IP networking assets.

ARRIS International, which is well known for its consumer routers, is set to acquire the Ruckus Wireless and ICX switch business from Brocade for $800 million in cash, pending the close of Broadcom's acquisition of Brocade.

Brocade acquired Ruckus Wireless for $1.5 billion in April 2016, which would mean at least a $700 million writedown in the value of the business.

It's not clear how much the ICX switch business is being valued at, but it's likely more than $0. The Brocade ICX switching product line provides robust capabilities that Brocade has been branding in recent years as the HyperEdge switching fabric.

The ICX isn't Brocade's only IP networking technology. Brocade also has its SLX networking portfolio that was expanded in December 2016 with the launch of the SLX 9850 router. Brocade also has its Workflow Composer platform that was gained through the acquisition of StackStorm in March 2016.

It's not clear if Brocade has found a buyer yet for any other piece of its IP networking portfolio beyond the Ruckus and ICX products. Brocade originally entered the IP networking market through the $3 billion acquisition of Foundry Networks in 2008.

"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," Broadcom CEO Hock Tan said in a statement.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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