After finally closing on its $800 million purchase of Ruckus Wireless and the ICX Switch business from Broadcom, Arris announced today that it will keep the Ruckus brand name and the company’s 1,700-member staff intact.
The companies will operate under the official title of “Ruckus Networks: An Arris Company.” The company will become part of the Arris Enterprise Networks group, which will be headed by Dan Rabinovitsj, who previously operated under the title of COO of Ruckus Wireless.
“The brand equity we pick up, we don’t want to lose,” said Arris CEO Bruce McClelland, speaking in a short video PR video segment, alongside Rabinovitsj, released by Arris today.
“One of the important theses behind the acquisition was to allow us to think about building out a new enterprise-based business,” McClelland added. “And as I've gotten around and been able to talk to a few of your customers, there’s a huge potential for us to really build on the platform you've created—the platform being this strong set of channel partners and add more to that business. The vision is we’re going to become one of the largest technology companies providing technology and services to both carriers and enterprise. We have a huge runway ahead of us in that area. What could be more exciting than that? It's fantastic.”
“Given the cult-like following around the Ruckus brand, we don’t want to lose that,” Rabinovitsj concurred.
After numerous delays, Broadcom finally completed its yearlong $5.5 billion quest to buy Brocade Systems two weeks ago, clearing the way for Arris to purchase Brocade’s Ruckus Wireless assets in a related purchase.
Ruckus technology is integral to Arris’ plans to enter the wireless business. In July, for example, Arris announced that Ruckus components are included in the Carrier-Class Service Provider Wi-Fi Solution. Currently deployed by Mediacom, it's the backbone of the MSO’s new Wi-Fi network.
Analysts who have been lamenting the decline of Arris’ pay TV set-top business are bullish regarding the company’s Ruckus purchase.
“We believe Ruckus can be a transformational acquisition that will help return Arris to organic growth despite the obvious challenges for set-top boxes,” said BTIG Research analyst Walter Piecyk.
“We are increasingly optimistic about the new revenue opportunities available to Ruckus based on the broadening interest in 3.5 GHz spectrum as an early 5G building block for cable, wireless and even technology companies,” Piecyk added. “In addition, we believe Ruckus’ legacy enterprise WiFi business has stabilized after the weakness created by the disruption from Brocade. Finally, Arris strong free cash flow will enable it to retire at least 20% of its share count over the next two years, if the stock does not adequately respond to its return to growth in 2018.”