Bankruptcy challenged Avaya has agreed to sell its networking business to Extreme Networks for approximately $100 million. Avaya filed to restructure under Chapter 11 bankruptcy protection in January, and at the time, it said it was in negotiations to monetize some of its assets.
"After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders," said Avaya 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 Center solutions."
As of now, Extreme Networks is the primary bidder for Avaya's networking business, but per bankruptcy court procedure, Avaya can still accept bids from other interested parties up until an undisclosed deadline set by the court. Regardless, Avaya expects to close the asset sale by June 30.
Avaya was spun off of Lucent Technologies in 2000 and became a private company in 2007 following an $8.2 billion deal with Silver Lake and TPG Capital. Avaya expanded into networking in 2009 after it acquired Nortel Enterprise Solutions.
As for Extreme, the San Jose-based company said Avaya's networking business is aligned with its growth strategy and will help broaden Extreme's portfolio across vertical markets.
"Furthermore, we expect the Avaya business to generate over $200 million in annual revenue, increase our market share and offer new opportunities for our customers," said Extreme Networks CEO Ed Meyercord.
"Although our agreement is subject to required approvals, the timing of which is uncertain, we expect the combined businesses can achieve synergies and provide accretion to Extreme's fiscal 2018 earnings and cash flow."
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