Brocade close to sale - Mobile World Live

Brocade close to sale

01 NOV 2016

Network vendor Brocade Communications is in the final stages to sell its business, and a deal could be announced as early as this week, reported Bloomberg.

Citing unnamed sources, the publication said the equipment maker is in advanced talks of the sale process, with chipmaker Broadcom reported as one of the potential interested buyers.

However, no deal has been reached, and talks may still fall apart, added Bloomberg.

San Jose-based Brocade competes mainly with network giant Cisco and Hewlett Packard Enterprise. It makes switches and routers for data centres, as well as storage area networking, providing fast links between data storage and services.

Earlier this year, it announced a $1.2 billion deal to acquire Wi-Fi gear maker Ruckus Wireless, in a push to expand its wireless product offering, and open up its opportunities around 5G, IoT and LTE/Wi-Fi integration.

The company has however struggled to compete with its larger rival Cisco, which specialises both in hardware and software solutions.

For a component maker like Broadcom, a deal to add Brocade’s networking gear might be an attractive proposition, and help it play a greater role in the data centre space with the increasing shift towards cloud, noted Bloomberg.

Brocade has a market valuation of approximately $3.5 billion, with $1.2 billion in cash and $1.5 billion in debt.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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