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Extreme Networks has emerged as the winning bidder for Avaya’s enterprise networking business and will move ahead with the $100m purchase of the business unit after the firm filed for Chapter 11 bankruptcy in January 2017.
Avaya first acquired its networking business from former sector heavyweight Nortel in 2009, in similar circumstances, after Nortel fell into bankruptcy and was forced to shed most of its business in a series of auctions.
The firm declared bankruptcy to buy itself more time to restructure its balance sheet. It sees this process as a critical element of transitioning towards a software and services business model.
“We believe a sale of our networking business is the best path forward for all stakeholders,” said CEO Kevin Kennedy. “It provides a clear and positive path for our networking customers and partners, and enables the company to focus on its core, industry-leading unified communications and contact centre solution.”
Extreme president and CEO Ed Meyercord said the acquisition would establish the company as a major strategic competitor in enterprise networking.
It expects Avaya business would generate it revenues of around $200m per annum, adding to a number of recent acquisitions that have enabled the firm to rapidly expand.
In the autumn of 2016, it acquired Zebra’s wireless local area network (WLAN) business for $55m, and earlier this year bought Brocade’s datacentre networking assets because the company’s new owner, Broadcom, was only interested in its storage business.
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- Users of Avaya networking products would be in a strong negotiating position if Extreme Networks bought the portfolio.
- Extreme Networks provides a variety of campus LAN switches, including those with just a few fixed ports and modular switches that can accommodate gigabit and multi-gigabit ports.
Zebra’s assets are expected to add $115m in revenues and Brocade’s, over $200m during Extreme’s financial 2018, which will start on 1 July 2017.
“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 datacentre networking business,” said Meyercord.