Brocade Acquires Riverbed SteelApp ADC Business

Networking solutions vendor Brocade (BRCD) said it will buy Riverbed’s (RVBD) SteelApp application delivery controller (ADC) business in an all-cash deal whose financial terms neither company disclosed.

With the deal, Brocade gains both the assets of the SteelApp business and its development and field teams, which will move over to Brocade after the transaction closes by the end of May, 2015 or before the vendor’s FQ2 concludes.

Brocade said it will fold the SteelApp business group into its Software Business Unit headed by senior vice president and general manager Kelly Herrell. Brocade said once the deal closes, its financial performance will remain within the non-GAAP operating margin target range it offered to investors in September.

In December, private equity firm Thoma Bravo snapped up Riverbed in a $3.6 billion buyout after the vendor twice rejected activist investor Elliott Management’s earlier buyout bids.

The SteelApp product line controls traffic to and from applications and facilitiates secure application delivery to cloud-centric or data center users. Brocade officials said the SteelApp line will flesh out its existing software networking portfolio and, combined with its networking hardware offerings, will enable it to offer more advanced solutions to its data center and service provider customers.

Brocade chief executive Lloyd Carney said the SteelApp acquisition “strengthens Brocade’s unique position as the adoption of software-centric networking is accelerating. We are thrilled to add SteelApp’s widely-adopted solution to our portfolio and will invest our existing ADC resources to aggressively advance the roadmap and extend it into our open Vyatta Platform offering for NFV and SDN.”

Jerry Kennelly, Riverbed chairman and chief executive, said the WAN optimizer’s decision to divest the SteelApp product line owes to its strategy to stick to its core competencies.

“Riverbed is focused on providing solutions that provide CIOs unparalleled visibility, optimization, and control in the hybrid enterprise, ensuring on-premises, cloud and SaaS applications perform as needed,” he said.