Extreme Networks agreed to acquire Avaya’s networking business for roughly $100 million. Avaya, a company that went private in 2007, is struggling with bankruptcy. It filed to restructure under Chapter 11 bankruptcy protection in January. It also said it was looking for ways to monetize some of its assets.
Extreme Networks said Avaya’s networking business is in line with its strategy for growth, and that it will help broaden its portfolio across different verticals.
“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,” says 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.”
Avaya was a Lucent Technologies spin-off in the early 2000’s. The company went private in 2007, after a deal with Silver Lake and TPG Capital worth $8.2 billion. The company pushed into networking in 2009, having acquired Nortel Enterprise Solutions.
“If other qualified bids are submitted, an auction process will be conducted, in which the agreement with Extreme would set the floor value for the auction. Approval of a final sale to either Extreme or a competing bidder is expected to take place shortly after completion of an auction. The transaction is expected to close by June 30, 2017, the end of Avaya’s fiscal third quarter 2017, subject to regulatory approvals and other customary closing conditions,” Extreme Networks states.
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