Actu
Extreme Networks Announces Agreement to Acquire Enterasys Networks
September 2013 by Marc Jacob
Extreme Networks, Inc. and Enterasys Networks, Inc. today announced that Extreme Networks has entered into a definitive agreement to acquire all outstanding stock of Enterasys in an all cash transaction valued at $180 million.
As network switching leaders in enterprise, data center and cloud, Extreme Networks and Enterasys Networks together will combine and extend their world-class products and technologies to provide customers with some of the most advanced, high performance, and open solutions in the market as well as a superb overall customer experience.
The combined company will be committed to continue to support the product roadmaps of both companies going forward to protect the investments of current customers and avoid any disruption to businesses.
Within approximately two years, the combined companies expect that 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. We believe customers will benefit by having 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.
The companies’ revenue will be approximately double that of either company alone. Significantly increased scale is expected to enable greater investments in R&D to accelerate innovation and bring better technologies and products to market faster. It is also planned that the operating margin of the combined company will increase over time as synergies are realized. The acquisition, excluding transaction, integration and purchase accounting related costs, is expected to be immediately accretive.
Enterasys Networks, based in Salem, NH, is a privately held provider of wired and wireless network infrastructure and security solutions. It has approximately 900 employees and $330 million in annual revenues.
Terms of the Transaction:
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the fourth calendar quarter of 2013. Under the terms of the agreement, Extreme Networks will pay $180 million in cash in exchange for all outstanding shares of Enterasys. The acquisition has been approved by the board of directors of each company. Prior to the closing of the transaction, each company will continue to operate separately. Extreme Networks has received a preliminary debt commitment to finance at least $75 million of the purchase price, with the balance to be funded from cash on hand, although the closing of the transaction is not conditioned upon the receipt of any bank financing.
