Aruba Networks Inc., Sunnyvale, Calif., a provider of distributed enterprise network solutions, announced the execution of a definitive agreement to purchase Azalea Networks, a supplier of outdoor mesh networks.

Under the terms of the agreement, Aruba acquires Azalea in exchange for total consideration of approximately $27 million 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.
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. Aruba states the products with help it 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 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.”