Aruba predicts Azalea will blossom after $40m buyout

Wireless vendor splashes the cash on mesh specialist

Feeling flush: Aruba is to spend $27m in stock and up to $13.5m in cash over the next two years

Wireless LAN vendor Aruba Networks is to spend up to $40m (£26.7m) to acquire outdoor mesh network specialist Azalea Networks.

Aruba has agreed a buyout worth $27m in stock and up to $13.5m in cash, to be paid over the next two years. The acquisition is subject to closing conditions and Aruba expects to close the deal during its first fiscal quarter, which begins on 1 August.

Azalea is headquartered in California, with an operations centre in Beijing, which Aruba claims will sit nicely alongside its research and development centres in Bangalore and Silicon Valley.

Mesh networking allows each node in a network to behave as a router. Aruba's chief operating officer Hitesh Sheth claimed the technology would allow end users to take advantage of high-end applications.

“This acquisition brings our customers and prospects innovative new solutions for real-time outdoor applications such as video surveillance,” he said. “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.”

Mesh posted sales of about $5m last year and counts more than 140 firms as customers. High-profile projects include installing 600 nodes across 19 square miles of Beijing for the 2008 Olympics. In total, Azalea has shipped upwards of 25,000 nodes in the course of its history.

The firm's co-chief executive Frank Wang said: “Joining Aruba opens Azalea’s unique mesh solutions to a broad new set of markets that are underserved by traditional mesh vendors. 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.”