Extreme Networks finalizes Brocade Data Center Networking acquisition

Oct. 31, 2017

Extreme Networks, Inc. (NASDAQ: EXTR) says that its acquisition of Brocade Communications Systems, Inc.'s (NASDAQ: BRCD) data center switching, routing and analytics business has been finalized. Broadcom Ltd. reached an agreement to sell its Data Center Networking Business to Extreme in March of this year. At that time, it was announced that Extreme Networks would pay $55 million in cash to Broadcom.

Extreme Networks, Inc. (NASDAQ: EXTR) says that its acquisition of Brocade Communications Systems, Inc.'s (NASDAQ: BRCD) data center switching, routing and analytics business has been finalized. Broadcom Ltd. reached an agreement to sell its Data Center Networking Business to Extreme in March of this year (see "Broadcom to sell Brocade Data Center Networking Business to Extreme Networks"). At that time, it was announced that Extreme Networks would pay $55 million in cash to Broadcom.

According to Extreme, its data center offerings are used by enterprises and service providers in the education, hospitality, healthcare, retail, transportation and logistics, government, and manufacturing industries. Upon closing of the acquisition, Extreme obtains customer relationships, personnel, and technology assets from Brocade, including the SLX, VDX, MLX, CES, CER, Workflow Composer, Automation Suites, and other data center products. The company anticipates service improvements as a result of the acquisition.

By acquiring Brocade's portfolio, Extreme will obtain data center technology used by enterprises and service providers. Extreme says it expects to generate more than $230 million in annualized revenue from the acquired assets, and expects the transaction willbe accretive to cash flow and earnings for its fiscal year 2018, which began on July 1. The acquisition supports Extreme's growth strategy to advance the networking industry from the data center to the wireless edge, says the company.

"This is an exciting day for Extreme as we have now significantly strengthened our position in the expanding high-end data center market with the industry-leading solution for enterprise customers," said Ed Meyercord, Extreme Networks's president and CEO. "Through a series of synergistic acquisitions, Extreme is now a top player in the enterprise networking industry and expects to generate over $1 billion in annual revenues. Today's announcement is not only a significant milestone for our growth strategy, but it also allows us to assist more customers around the globe with end-to-end software-driven solutions to drive their digital transformation initiatives."

Extreme has announced two previous acquisitions this year, including acquiring Zebra Technologies' WLAN business and Avaya's networking business.

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