Arris Bidding for Brocade’s Networking Unit: Report

In a move that would fill a wireless gap in its technology repertoire, Arris is in talks to acquire Brocade Communications’s networking equipment business for up to $1 billion, Reuters reported.

Arris declined to comment on the report, but the company, which is a year removed from its acquisition of U.K.-based set-top maker Pace plc and a major supplier to cable operators, telcos and other service providers, has shown interest in growing its business by way of adjacent markets.

RELATED: Arris Wraps Up Pace Acquisition

Arris CFO Dave Potts hit on that topic Thursday (Jan. 12) at the Needham Growth Conference.

“As we continue to grow, we believe it’s possible we could get into adjacent markets, which could mean….as an example in wireless,” he said. “What happens to wireless over time – should we be more heavily into that? We’re always focused on what those next opportunities could really be.”

Arris’s reported interest in the networking unit of Brocade appears to come as wireless becomes a more important strategic focus for cable operators, which are already deploying millions of WiFi hotspots, while others, including Comcast and Charter Communications, have been pursuing wireless services that lean on MVNO agreements with providers such as Verizon.

RELATED: Charter Looking at Wireless Play Too

Arris already has some ties into the business of Brocade it is reported to be eyeing.

Brocade acquired WiFi specialist Ruckus Wireless in 2016, then Broadcom put up $5.5 billion for Brocade later in the year, though Broadcom announced an intention to sell off Brocade’s IP networking business, which includes wireless and campus networking products, data center switching and routing and software networking solutions. Arris isn’t interested in buying Brocade’s data center, switching and software assets tied to its anticipated divestiture, Reuters said.

Ruckus and Arris inked a global reselling deal in 2011, and continues to hawk several Ruckus products, including network controllers/gateways, analytics software, and WiFi access points.

RELATED: Ruckus Shares Soar on $1.2B Brocade Deal

Reuters said a sale of its networking business to Arris, or others that are also being courted, would ensure that Broadcom wouldn’t own a business that competes with clients such as Cisco Systems. The report added that a decision on a deal is expected by the end of January.

Arris shares closed Friday up 52 cents (1.78%) to $29.71 each.