Extreme Networks announced the acquisition of Aerohive Networks for $272 million.
The acquisition of Aerohive will add cloud management and edge capabilities to Extreme’s edge to cloud networking solutions.
It will provide a strong subscription revenue stream. Aerohive will expand Extreme’s mix of revenues to approximately 30 percent from subscription recurring revenue.
It will also strengthen Extreme’s position in wireless LAN at a critical technology transition to Wi-Fi 6.
Aerohive is a leader in cloud management, AI and machine learning. It was among the first companies to offer controller-less Wi-Fi and cloud network management, including cloud-managed Wi-Fi and network access control (NAC), and today is the second leading provider of Cloud Managed Wireless LAN Services.
Aerohive has a footprint of 30,000 cloud wireless LAN customers in verticals including education, healthcare, state and local government, and retail. This acquisition will bring new automation and intelligence capabilities to Extreme’s Elements portfolio.
It will expand Extreme’s technology leadership in Wi-Fi and NAC, adding cloud-managed Wi-Fi and NAC solutions to complement its on-premises Wi-Fi and NAC technology, driving Extreme into key verticals and presenting numerous opportunities for cross-sell and up-sell within the combined portfolios.
Extreme expects to gain new SD-WAN capabilities, in expanding its addressable market by a total of $1 billion in a market with a CAGR of 19 percent 2019 through 2022.
The acquisition is expected to close during Extreme’s first quarter of the fiscal year 2020.