Aruba Networks Inc. (NASDAQ: ARUN) has agreed to acquire Azalea Networks, a Milpitas, Calif.-based provider of outdoor mesh networks. The deal is valued at up to $40.5 million, including $27 million in stock and $13.5 million in cash. Azalea has raised over $14 million in VC funding.
Aruba Networks, Inc. (NASDAQ: ARUN), a global leader in distributed enterprise network solutions, today announced the execution of a definitive agreement to purchase Azalea Networks, a leading supplier of outdoor mesh networks. The acquisition includes highly differentiated mesh products for critical outdoor industrial applications in the oil and gas, logistics, manufacturing, mining, petrochemical, public safety, smart grid, and transportation sectors. These products will enable Aruba to deliver secure mobility solutions that span from indoor carpeted spaces to the outdoor industrial enterprise. The acquisition includes an operations center in Beijing, staffed by world-class engineers, which will complement Aruba’s existing R&D centers in Bangalore and Silicon Valley.
“This acquisition brings our customers and prospects innovative new solutions for real-time outdoor applications like video surveillance,” said Hitesh Sheth, Aruba’s Chief Operating Officer. “Enterprises need a secure, reliable link between their assets and the people who use them, wherever they work or roam. Outdoor networks need to cope with a wide range of environmental factors, and this challenge is compounded when video and voice need to be sent over long distances in real-time. Azalea has made outdoor mesh work in industrial enterprise applications that cut across a wide range of verticals.”
Under the terms of the agreement, Aruba will acquire Azalea in exchange for total consideration of approximately $27M in stock subject to certain adjustments and up to $13,500,000 in cash over two years. The acquisition is expected to close in the first quarter of Aruba’s 2011 fiscal year, subject to standard closing conditions, and to be neutral or accretive to results over the next twelve months. Azalea had 2009 revenues of approximately $5 million, and a total customer base of over 140 companies.
In a mesh network, data packets hop wirelessly from radio to radio. Azalea’s innovative mesh technology allows it to also carry latency-sensitive video and voice traffic, with full fidelity, over long distances. The value of this capability has been field-proven in demanding applications like the 2008 Beijing Olympic Games, in which 600 mesh nodes provided voice, video, and Wi-Fi access over 19 square miles (50 square kilometers) of the city. To date Azalea has shipped over 25,000 mesh nodes worldwide.
“Enterprises have primarily focused WLAN deployments on indoor spaces, but outdoor applications loom large,” said Matthias Machowinski, Directing Analyst for Enterprise Voice and Data at Infonetics Research. “The economic recovery, the need for ubiquitous connectivity, and emerging applications like smart grid and video surveillance are going to accelerate outdoor wireless infrastructure deployments by enterprises in the coming years. Azalea’s mesh technology will enable Aruba to provide an integrated, enterprise-wide wireless infrastructure that addresses both indoor and outdoor applications.”
“Joining Aruba opens Azalea’s unique mesh solutions to a broad new set of markets that are underserved by traditional mesh vendors,” said Frank Wang, Azalea’s cofounder and Co-CEO. “It also provides continuity to our existing customers, who are assured of uninterrupted support from Aruba’s award-winning customer care. A tradition of innovation drives both Azalea and Aruba, and this is reflected in the highly differentiated, customer-focused products we build. All of us at Azalea are delighted to be part of Aruba.”
About Aruba Networks, Inc.
Aruba is the global leader in distributed enterprise networks. Its award-winning portfolio of campus, branch/teleworker, and mobile solutions simplify operations and secure access to all corporate applications and services – regardless of the user’s device, location, or network. This dramatically improves productivity and lowers capital and operational costs.
Listed on the NASDAQ and Russell 2000� Index, Aruba is based in Sunnyvale, California, and has operations throughout the Americas, Europe, Middle East, and Asia Pacific regions. To learn more, visit Aruba at http://www.arubanetworks.com. For real-time news updates follow Aruba on Twitter, Facebook, or the Green Island News Blog.