Extreme Networks is buying the wireless local area networking business from Zebra Technologies in a cash deal valued at $55 million. Extreme CEO Ed Meyercord said the deal will bolster his company's wireless LAN footprint and brand.
Zebra Technologies, best known for its handheld, bar code, and RFID systems, acquired the wireless LAN business when it bought Motorola Solutions in 2014. But Zebra was focusing more on its core businesses. Enter Extreme, which was already a strong Zebra customer.
Meyercord said the acquisition will move wireless LAN from 10 percent of Extreme's revenue to more like 25 percent. Wireless LAN is also growing faster than traditional networking gear and will give Extreme more of an end-to-end portfolio.
"We have a very focused strategy on enterprise campus networking that's both wired and wireless and software driven," said Meyercord. The CEO added that the acquisition also adds blue-chip customers such as FedEx and Wal-Mart to the Extreme roster. "These blue-chip customers will raise the profile of Extreme," said Meyercord.
Meyercord added that the purchased wireless LAN assets will mesh well with its management, control and analytics gear, and software. Extreme said the purchase will boost cash flow and earnings in fiscal 2017 and generate more than $115 million in annual revenue.
Here's the product and market roster.
The transaction is expected to close in about a month. Meyercord said the purchase revolves around bringing in the Zebra wireless LAN assets instead of integrating. Meanwhile, Zebra and Extreme both run on Oracle with Salesforce for CRM.
"This is a data mapping exercise and we're transferring data and accounts into our platform," said Meyercord. "We're now mapping accounts to sales team and have some runway with refreshed product. We think there is pent-up demand."
For the fiscal year ending June 30, Extreme had revenue of $530 million.