Sources: Execs Already In Talks To Sell Brocade-Ruckus Networking Assets, Lots Of Interest, Not A 'Fire Sale'

Senior executives are already negotiating to sell the Brocade Communications and Ruckus Wireless networking business to interested parties, including private equity firms, sources told CRN.

"They are already in discussions and there are a lot of interested parties," said a source close to the company, who did not want to be identified. "They just went through the process of shopping Ruckus, so they know who is interested. It's pretty easy to start having those conversations. This is not a fire sale. It is not a distressed business. It is a profitable business with a great portfolio and very strong market position.

[Related: Partners 'Bewildered and Confused' By Broadcom's $5.9B Acquisition Of Brocade-Ruckus]

The negotiations are taking place after Broadcom Wednesday said it was acquiring Brocade Communications Systems in a $5.9 billion blockbuster deal. Broadcom immediately announced that it would divest Brocade's networking business including Ruckus Wireless. That Ruckus Wireless business was acquired for $1.2 billion by Brocade just seven months ago.

The aim, sources said, is to announce a good home for Brocade before the acquisition is completed in second half of Broadcom's fiscal 2017 which runs from May 1, 2017, to Oct. 31, 2017.

"The Brocade Ruckus team is moving as fast as possible to get past the period of uncertainty," said one source close to the company. "There is a maniacal focus on this. They could even become a private company again which would provide more room for growth. They want to restore a sense of calm and confidence."

Broadcom and Brocade could not be reached for immediate comment.

But in a Brocade email of frequently asked questions (FAQ) on the deal when asked what is the impact on Brocade's IP (networking) specific partners, the company said: "For the IP Networking business, these questions will be better answered once a buyer is identified. It is Brocade’s intention to assist Broadcom in finding a buyer that will continue the momentum that Brocade has built with customers and partners."

Ironically, Ruckus Wireless, which has been a perennial market share leader in hospitality and service providers, was just recently integrated into Brocade, sources said. "It is really easy for Ruckus to get the band back together, they were operating as a standalone company for a long time, all of the structure is still there to go do that," said a source.

Gary Berzack, CTO and COO of New York-based eTribeca, one of the most widely respected wireless solution providers in the country, said he is excited to hear that Brocade-Ruckus executives are aggressively moving to embrace the break off that was inevitable from the Brocade Fibre Channel (FC) channel storage business.

"It would have been nice to have another year under our belt so that the switches were fully integrated into the Ruckus brand," said Berzack. "Now it is all about timing and execution and communicating clearly with channel partners over the next six months."

Berzack said he feels Ruckus has been "overburdened" by a heavy corporate Brocade structure. "It's possible we could now get nimble and reenergized," he said. "The Ruckus culture has always been about being the underdog and breaking through to be seen and heard against the big guys. Hopefully, we'll see once again the Ruckus dog barking at the industry 800-pound Gorillas."

One source close to Brocade and Ruckus said the company was in the midst of a plan to double down on the channel with increased channel headcount and market development funds. "That is still in place," said the executive.

Sources said Brocade and Ruckus executives are reaching out to partners to have faith in the leadership team negotiating the sale of the networking business. "They are saying to channel partners have faith that we are going make a soft landing here," said one source close to Brocade. "They are asking the channel to have their back just like they have had our back in the past. "

The message from the executive team is that they are working "tirelessly night and day to find a great home" for the business, said a source close to the company.