Brocade Buying Ruckus Wireless Inc for $1.5 Billion

On Monday, San Jose California based Brocade Communications Systems Inc. said it has agreed to acquire Ruckus Wireless Inc. for $1.5 billion.

In a statement, Brocade's CEO Lloyd Carney said, "We're positioning ourselves to lead where technology is headed."

The news worked well for Ruckus, based in Sunnyvale, California. The company that supplies advanced wireless devices globally saw its shares climb 32 percent to $13.20 during trading hours on Monday. However, Brocade shares dropped 14 percent to $9.14.

The deal is valued at roughly $1.2 billion excluding cash. The move made by Brocade, is seen as an effort to keep pace with the quickly changing marketplace.

For the last two years, both the companies have worked side by side on different projects. Individually the companies provided networking switches and wireless hookups to San Jose city and for the Californian Capital, Sacramento's Golden 1 Center arena.

Selina Lo, Ruckus CEO said, "That's when we realized there's a lot of complementarily" between the products of the two companies. She added, "We looked at what's coming down the road and saw that an ability to offer a complete solution is very attractive."