Extreme Doubles Up With Enterasys Buyout

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Wedding bells chime for Extreme Networks and Enterasys Networks in $180 million all-cash deal.

Editor’s note: As part of our special editorial partnership, Channelnomics is publishing  this recent article from CRN in the UK.

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Extreme Networks has acquired fellow networking vendor Enterasys Networks Inc. in a $180 million all-cash deal.

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The two companies claim the deal means Extreme will "approximately double" its yearly revenue, which was $299.3 million for the year to June 30, 2013, with GAAP net income of $9.7 million. With annual sales of about $330 million, New Hampshire-based Enterasys is actually larger than its new owner.

In an announcement, Extreme pledged that "the combined company will be committed to continue to support the product road maps of both companies going forward to protect the investments of current customers." The statement also predicted that the two firms' network operating systems will be merged into a single entity supporting both hardware platforms.

Enterasys chief executive Chris Crowell said, "Our number-one priority is to ensure an even more positive customer experience by preserving the value of our current customers' investments and combining the best of both companies' technologies and talent."

Extreme chief executive Chuck Berger saluted the credentials of his new acquisition's switching, wireless and system management technologies.

"Combining Enterasys technologies and products... will extend and complement our product offering, which we expect will provide significant added value to the current customers of both Extreme and Enterasys."

Founded in the first year of the new millennium after being spun out of Cabletron Systems, Enterasys was acquired by the Gores Group in 2005. The private equity house snapped up a majority share in Siemens Enterprise Communications three years later, and rolled its two networking vendors into a joint venture.

California-based Extreme was founded in 1996 and floated publicly on the Nasdaq three years later. In 2001 it bought Optranet and WebStacks for a combined consideration of a little under $150 million. The ambitious networking player recently made its play for the converged infrastructure of larger rivals HP and Cisco after announcing a strategic tie-up with hardware giants Lenovo and EMC Corp.

For more UK channel coverage from CRN, visit www.channelweb.co.uk.

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