Extreme Networks confirms it's buying Avaya's network biz
'Approximately US$100m' to change hands for assets hoped to generate $200m a year
Avaya and Extreme Networks have confirmed that the former will sell its networking business to the latter, for “approximately US$100m”.
The two flagged the deal in March, but because Avaya was courting other bids it's taken a while for Extreme to be confirmed as the buyer.
Now both companies have emitted canned statements saying the deal is done, or will be once all the lawyering, signing and rubber-stamping is done ahead of an expected July 1 closing date.
Avaya is selling the networking business it needs cash to help it restructure debts it has struggled to service, and wants to focus on unified communications and the such like. Extreme wants to go head-to-head with the likes of Cisco and HPE, so has also acquired Brocade's data centre networking assets to give it a portfolio that covers the data centre core, LAN, campus networks, the WAN and security too.
Extreme reckons the deal is a cracker because while “Avaya Networking has not yet delivered standalone-audited financials for the business” it believes it will “yield annual revenues in excess of $200 million.”
It also says it can turn the $55m it's spending on Brocade's bits into $230m annualised revenue, and the $55m slurp of Zebra networks into another $115m a year. If those numbers are right, by this time next year Extreme will have new revenues of $545m to add to the $528m reported in FY 2016.
At just over $1bn a year, Extreme will hardly have the scale to compare with HPE and Cisco, or even Juniper networks. But it won't be far behind Arista, which is generally seen to be worth adding to enterprise networking shopping lists. ®
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