SAN JOSE, Calif., May 31, 2017 /PRNewswire/ -- Extreme Networks, Inc. ("Extreme") (NASDAQ: EXTR) today announced that it is the winning bidder to acquire Avaya Inc.'s ("Avaya") networking business. The assets of Avaya's networking business unit will therefore be sold to Extreme for approximately $100 million, in accordance with the terms and conditions of the asset purchase agreement entered into March 7, 2017. The final agreement has been approved by the United States Bankruptcy Court for the Southern District of New York and is expected to close on or shortly after July 1, 2017, subject to customary closing conditions and regulatory approvals.
"This strategic acquisition will be another milestone in the execution of Extreme's growth strategy and clearly establishes Extreme as the third largest competitor in our enterprise markets and the only company in the world exclusively focused on delivering the highest quality end-to-end, wired and wireless enterprise IP networking," said Ed Meyercord, President and CEO of Extreme Networks. "The conclusion of the auction process signals a big step forward in making this transaction a reality. Avaya's networking business complements our existing portfolio and will significantly broaden Extreme's enterprise solutions capabilities across our vertical target markets. We are moving forward with our integration planning for both Avaya Networking and the Brocade Data Center Networking business."
Extreme will host a live webinar on June 14, 2017 to unveil its post-close go-to-market positioning and combined product roadmap with the Avaya Networking assets.
As previously announced, Extreme anticipates the transaction will be accretive to cash flow and earnings for its fiscal year 2018, which begins on July 1, and expects to generate over $200 million in annualized revenue from the acquired networking assets from Avaya. The announcement builds on Extreme's strategy to expand the company's state-of-the-art portfolio of data center, core, campus and edge networking solutions through a series of strategic acquisitions. In October 2016, the company closed its acquisition of the wireless LAN business from Zebra Technology Corporation, which is expected to generate over $115 million in annualized revenue in fiscal year 2018. In March, Extreme announced it entered into an agreement to acquire Brocade Communications Systems, Inc.'s data center switching, routing, and analytics business from Broadcom following the closing of Broadcom's acquisition of Brocade. The Brocade transaction, once closed, is expected to generate over $230 million in annualized revenue from the acquired assets.
Forward Looking Statements
Except for the historical information contained herein, the statements in this release, including those concerning Extreme's business outlook, future financial and operating results, and overall future prospects are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements speak only as of the date of this release. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: our ability to consummate the acquisition of Avaya's networking business; our ability to close the Brocade transaction; our ability to successfully integrate the Avaya and Brocade assets into the current Extreme business; failure to achieve targeted revenues and forecasted demand from end customers; a highly competitive business environment for network switching equipment; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; and a dependency on third parties for certain components and for the manufacturing of our products.
More information about potential factors that could affect Extreme's business and financial results is included in Extreme's filings with the U.S. Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors". Except as required under the U.S. federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, Extreme Networks disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.
About Extreme Networks
Extreme Networks, Inc. (EXTR) delivers software-driven networking solutions that help IT departments everywhere deliver the ultimate business outcome: stronger connections with customers, partners and employees. Wired to wireless, desktop to data center, on premise or through the cloud, we go to extreme measures for our customers in more than 80 countries, delivering 100% insourced call-in technical support to organizations large and small, including some of the world's leading names in business, hospitality, retail, transportation and logistics, education, government, healthcare and manufacturing. Founded in 1996, Extreme is headquartered in San Jose, California. For more information, visit Extreme's website or call 1-888-257-3000.
Extreme Networks and the Extreme Networks logo are either trademarks or registered trademarks of Extreme Networks, Inc. in the United States and/or other countries. Other trademarks are the property of their respective owners.