Extreme Networks has emerged as the winning bidder to acquire Avaya’s networking business for $100 million following its original March 7 bid.
Now that the final agreement has been approved by the United States Bankruptcy Court for the Southern District of New York, it is expected to close on or shortly after July 1, 2017, subject to customary closing conditions and regulatory approvals. During the court-supervised process, Extreme became the lead bidder, while other interested parties were offered an opportunity to bid before a sale was finalized.
RELATED: Extreme Networks purchases Avaya’s networking business for $100M
Ed Meyercord, president and CEO of Extreme Networks, said in a release that the Avaya assets fit well with its enterprise services strategy.
“Avaya's networking business complements our existing portfolio and will significantly broaden Extreme's enterprise solutions capabilities across our vertical target markets,” Meyercord said. “We are moving forward with our integration planning for both Avaya Networking and the Brocade Data Center Networking business."
Extreme said previously that it expects Avaya’s business will add more than $200 million in annual revenue and increase its market share, while adding to earnings and cash flow. Purchasing the Avaya assets is only one part of a broader effort by Extreme to bolster its portfolio of data center, core, campus and edge networking solutions via targeted strategic acquisitions.
In October 2016, the company acquired wireless LAN business from Zebra Technology Corporation, which is expected to generate over $115 million in annualized revenue in fiscal year 2018. Later in March, Extreme entered into an agreement to acquire Brocade Communications Systems’ data center switching, routing, and analytics business from Broadcom following the closing of Broadcom's acquisition of Brocade. Upon completion, the Brocade transaction is expected to generate over $230 million in annualized revenue from the acquired assets.
For Avaya, the sale of the data networking business is part of the troubled company’s effort to pay down debt. Avaya filed for Chapter 11 bankruptcy in January. At that time, the troubled vendor made a decision to not sell its call center business.
The Santa Clara, California-based vendor said that it obtained a $725 million loan to fund its operations during the filing.