Arris’ $800M play to acquire Ruckus hits snag

Arris
Arris International's acquisition of Ruckus Wireless hit a regulatory snag.

Arris International said its confident that its $800 million purchase from Brocade of Ruckus Wireless and the ICX switch business will eventually go through, despite an unexpected regulatory hurdle. 

The Arris purchase, announced in February, was contingent on the closure of Brocade’s acquisition of Broadcom, which was announced in November and executed to close at the end of July. 

But in an 8-K filing to the SEC made earlier this week (originally reported on by Multichannel News), Brocade said that it had jointly agreed with Broadcom to refile their regulatory application with the Committee on Foreign Investment in order to build more time into the process. Once the agency accepts the new, jointly filed notice, it will take 30 days to review it. This will 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,” Brocade said in its 8-K filing. “There can be no assurances, however, that CFIUS will ultimately agree that the parties may proceed with the proposed acquisition.”

RELATED: Mediacom taps Arris to backbone Wi-Fi network

Arris said in a statement, “As previously mentioned, Arris’ 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.”

Ruckus technology is integral to Arris’ plans to enter the wireless business. On Wednesday, 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.