Extreme Networks to Purchase Enterasys

Extreme Networks, Inc. of San Jose, Calif. and Enterasys Networks, Inc. of Salem announced an agreement in which Extreme will purchase all outstanding stock of Enterasys in a cash transaction valued at $180 million.

As network switching businesses focused on enterprise, data center and cloud products and services, Extreme Networks and Enterasys Networks will combine and extend what they do to provide customers with some of advanced, high performance, and open solutions in the market.

"The combination of Extreme Networks and Enterasys is significant in that it brings together two companies with distinct strengths addressing the key areas of the network, from unified wired and wireless edge, to the enterprise core, to the data center and cloud," said Zeus Kerravala, principal analyst and president of ZK Research. "With an open software approach, the companies can drive product innovations and customers will benefit from their increased resources and larger scale."

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.

"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," said Chris Crowell, president and CEO of Enterasys Networks.

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 immediate.

Enterasys is a privately held provider of wired and wireless network infrastructure and security products with roughly 900 employees and $330 million in annual revenues.