Extreme Networks is investigating the acquisition of Ruckus Networks from CommScope. The deal could be worth more than $1 billion (€857 million). No decision has been made yet, and Extreme may decide not to proceed with the acquisition.
This is according to Bloomberg, based on sources. At the close of trading on Monday, Extreme Networks had a market value of approximately $2.1 billion. CommScope shares rose 2.9 percent to $19.04, giving the company a market value of approximately $4.2 billion.
Extreme Networks’ customers are primarily large organizations, including the federal government and financial services providers. An acquisition would significantly expand its portfolio. Ruckus supplies Wi-Fi access points, network switches, and related software to hotels, schools, stadiums, and other customers. Its products are designed for environments where standard Wi-Fi often struggles.
Ruckus has had an eventful ownership history. The company was founded in the early 2000s and went public in 2012. About four years later, it was acquired by Brocade Communications. Ownership changed again before CommScope acquired the company in 2019 through its acquisition of Arris International.
That earlier period involving Brocade is interesting. In 2017, Broadcom bought Brocade for $5.5 billion, but then sold Ruckus Wireless to Arris International for $800 million. At the time, Extreme Networks picked up Brocade’s data center networking business for $55 million. Now, it could still acquire a piece of that puzzle.
CommScope sells assets to reduce debt
CommScope has recently sold assets to repay debts. Last year, the company sold its broadband and cable equipment division to Amphenol for approximately $10.5 billion. That deal was finalized on Monday. The remaining company, which includes Ruckus and other activities, will be renamed Vistance Networks as of January 14.
Ruckus would be attractive to Extreme because it has strong positions in sectors where traditional Wi-Fi falls short.