Extreme Networks, the Ethernet switching for cloud, data centre and mobile networks provider based in Santa Clara, California, is to buy Enterasys Networks for $180m it announced today (12 September 2013).
Enterasys, based in Salem, New Hampshire, USA, 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.
In a statement issued today Extreme Networks said that as network switching leaders in enterprise, data centre 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.
Zeus Kerravala, principal analyst and president of ZK Research, commented: “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 centre and cloud. 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.
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.
Extreme Networks’ statement noted that “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”.
Chuck Berger, president and CEO of Extreme Networks, said: “Since its first release in 2004, ExtremeXOS has been developed with a Linux abstraction layer that makes it relatively easy to extend ExtremeXOS to support other vendors’ switching hardware.
“Combining Enterasys technologies and products including their Coreflow modular switches, IdentiFi wireless and the NetSight system management application will extend and complement our product offering which we expect will provide significant added value to the current customers of both Extreme and Enterasys.”
Chris Crowell, president and CEO of Enterasys Networks, added: “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.”
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.