Extreme Networks bulks up, acquires Enterasys Networks for $180 million

Summary:Extreme Networks will double its annual revenue and get better scale with the acquisition.

Extreme Networks said Thursday that it'll acquire Enterasys Networks in a deal valued at $180 million in a bid to bulk up to better compete with networking giants. 

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Enterasys provides routers, switches, Wi-Fi gateways and security and management software. Key customers include the Philadelphia Eagles, which used Enterasys to network their stadium, and healthcare systems such as the Henry Ford Health System and companies such as Comcast and ING.

According to Extreme, the plan is to combine the product and technology roadmaps and ultimately meld the ExtremeXOS network operating system with Enterasys' and support hardware from both companies within two years.

The deal should close in the fourth quarter. Extreme recently forged partnerships with Lenovo and EMC

On the hardware side, Extreme said the product roadmaps of both companies will be supported going forward.

Enterasys was a 2000 spin-off of Cabletron Systems, which struggled to compete with the likes of Cisco. In 2005, Enterasys went private in a $386 million and was acquired by The Gores Group and Tennebaum Capital Partners.  After Enterasys went private, then CEO Mike Fabiaschi set out to grow the company to have $1 billion in annual revenue. To that end, Enterasys forged a joint venture with Siemens in 2008. In the middle of that Siemens integration, Fabiaschi died

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The combined company expects to double revenue to about $630 million and bolster research and development spending. The acquisition will also boost earnings immediately.

Enterasys, privately held, has about 900 employees and $330 million in annual sales. Extreme has $299 million in annual sales.

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Topics: Networking, Data Centers

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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