Extreme Networks to acquire Enterasys for $180 million

Extreme Networks is set to acquire Enterasys in a cash deal valued at $180 million.

The acquisition brings together two companies with distinct strengths addressing the key areas of the network, from unified wired and wireless edge, to the enterprise core, to the data center and cloud, the company said.

The partnership is expected to deliver an advanced, high performance, and open solutions in the market improving overall customer experience.

extreme networksThe combined revenue will be approximately double that of either company alone.

Enterasys Networks has approximately 900 employees and $US330 million in annual revenues.

For the fiscal fourth quarter ending June 30, 2013, Extreme Networks reported revenues of $79.5 million, an increase of 16.5 percent compared to the prior quarter’s revenues of $68.2 million and a 9.4 percent decrease compared to revenues of $87.7 million in Q4 2012.

According to Zeus Kerravala, principal analyst and president of ZK Research, the combination brings together two companies with distinct strengths addressing the key areas of the network, from unified wired and wireless edge, to the enterprise core, to the data center and cloud.

Significantly increased scale is expected to enable greater investments in R&D to accelerate innovation and bring better technologies and products to market faster, the company said.  The operating margin of the combined company will increase over time as synergies are realized.

“With an open software approach, the companies can drive product innovations and customers will benefit from their increased resources and larger scale,” Kerravala added.

After this acquisition, ExtremeXOS, Extreme Networks advanced network operating system, will be extended to incorporate additional features that are available in the Enterasys network operating systems and fully support both hardware platforms.

Customers will benefit as they can have a single network operating system that delivers functionality across both product lines and is designed to allow customers to   seamlessly choose which hardware platform best meets their deployment needs.

Combining Enterasys technologies and products including their Coreflow modular switches, IdentiFi wireless and the NetSight system management application will extend and complement the product offerings from Extreme Networks.

The acquisition, excluding transaction, integration and purchase accounting related costs, is expected to be immediately accretive.

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