Analysts Downgrade: Ruckus Wireless Inc

Ruckus Wireless Inc (NYSE:RKUS) received a stock rating downgrade from Stifel on Apr-05-16. In a note to investors, the firm issued a Hold rating. The analysts previously had a Buy rating on the stock.

The 52-week price range is $7.25-$13.50 and the company has a market capitalization of $1.18 billion. Analysts covering the shares maintain a consensus Buy rating, according to Zacks Investment Research. Zero analyst has rated the stock with a sell rating, 9 has assigned a hold rating, 2 says it’s a buy, and 1 have assigned a strong buy rating to the company.

Ruckus Wireless Inc (RKUS) on April 4, 2016 announced that Brocade has entered into a definitive agreement to acquire Ruckus Wireless, Inc. in a cash and stock transaction. The acquisition will complement Brocade’s enterprise networking portfolio, adding Ruckus’ higher-growth, wireless products to Brocade’s market-leading networking solutions. It will also significantly strengthen Brocade’s strategic presence in the broader service provider space, with Ruckus’ market-leading Wi-Fi position. Brocade expects the transaction to be accretive to its non-GAAP earnings by its first quarter of fiscal 2017. The Ruckus organization will be led by current Ruckus CEO, Selina Lo, and report directly to Brocade CEO, Lloyd Carney.

Under the terms of the agreement, Ruckus stockholders will receive $6.45 in cash and 0.75 shares of Brocade common stock for each share of Ruckus common stock. Based on the closing price of Brocade’s stock on April 1, 2016, the transaction values Ruckus at a price of $14.43 per common share, or approximately $1.5 billion, and may fluctuate until close. Net of estimated cash acquired, the transaction value is approximately $1.2 billion.The cash portion of the purchase price will be funded through a combination of cash on hand and new bank term loan financing.

Ruckus Wireless, Inc. provides Wi-Fi solutions to service providers and enterprises worldwide. It offers SmartZone, a line of carrier-grade wireless access and management products that include SmartZone controllers, as well as software solutions, such as vSZ and virtual SmartZone Data Plane. It also provides ZoneDirector, a Wi-Fi controller that streamlines the configuration and management of Ruckus Smart Wi-Fi access points; ZoneFlex indoor and outdoor access points, which support various virtual WLANs, Wi-Fi encryption, and advanced traffic handling, as well as point-to-point and multipoint bridges; and Unleashed, a controllerless indoor Wi-Fi access points for small business owners.

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