Arris Still Confident It Will Land Ruckus

Arris said it remains confident that it will get its hands on Brocade’s Ruckus Wireless and ICX switch businesses despite a snag that could alter the anticipated timing.

Arris’s proposed $800 million play for that portion of Brocade hinges on the closing of the merger of Brocade and Broadcom, which has hit a bit of a speed bump.

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In an 8-K filed July 17, Brocade said it and Broadcom agreed to withdraw and re-file their joint voluntary notice to the Committee on Foreign Investment in the United States to allow more time for review and discussion about the proposed acquisition. Once CFIUS accepts that joint voluntary notice, it will start a new 30-day review period, which may be followed by a 45-day investigation period.

“Brocade and Broadcom have been and will continue to be actively engaged with CFIUS during its review of the proposed acquisition. There can be no assurances, however, that CFIUS will ultimately agree that the parties may proceed with the proposed acquisition,” Brocade explained in the filing.

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Under the terms of the merger deal, if the proposed deal is not completed on or before August 1, 2017, the deal could be terminated, though the companies have the ability to extend that date.

Brocade and Broadcom said they “remain fully committed to the proposed acquisition,” noting that the current expectation is that they’d complete the deal during Broadcom’s fiscal Q4, which ends Oct. 28, 2017.

How that shakes out is important to Arris, as the addition of Ruckus would help the company expand more deeply into wireless, a category that has become increasingly important to its cable operator customers. This week, Arris announced that Mediacom Communications had selected its hosted WiFi platform, which includes Ruckus products, for the MSO’s WiFi network rollout.

Here’s Arris’s statement on the matter:

“As previously mentioned, ARRIS’s agreement to acquire Brocade’s Ruckus business from Broadcom is contingent on Broadcom closing its acquisition of Brocade. We are aware that Broadcom and Brocade are undergoing a CFIUS (Committee on Foreign Investment in the United States) review, and yesterday agreed to refile their notice to provide CFIUS more review time, given the transaction’s complexity. As a result, Broadcom and Brocade now expect the transaction to close before the end of their 4th fiscal quarters.

ARRIS remains confident that we will close the Ruckus acquisition shortly following that closing.”

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