Extreme Networks to buy Brocade’s data center assets
In this article (5)
Software-driven networking vendor Extreme Networks has arranged to buy the data center networking business of Brocade for $55 million.
Extreme Networks has entered an agreement with Broadcom – which itself arranged to purchase Brocade in November last year for around $5.9 billion – to purchase Brocade’s data center switching, routing and analytics business.
The acquisition is expected to close within 60 days after the closing of Broadcom’s acquisition of Brocade, which is due during the quarter ending in July.
Extreme Networks said it expects the purchase to be earnings accretive by fiscal 2018 and to generate over $230 million in new annualized revenue.
“The addition of Brocade’s data center networking business significantly strengthens our position in the expanding high-end data center market and reinforces our strategy of delivering software-driven networking solutions focused on enterprise customers,” Extreme Networks president and CEO Ed Meyercord said.
“Today’s announcement, coupled with our recent announcements regarding our position as the stalking horse bidder of Avaya’s networking business and the successful completion of the integration of Zebra’s wireless LAN business, along with Extreme’s organic investments in R&D, will result in a state of the art, newly-refreshed portfolio of enterprise solutions for our customers.”
Broadcom announced an intention to divest Brocade’s IP networking business as part of its planned acquisition of the vendor, focusing on the company’s remaining fiber channel storage area network business.
Questions & Answers
Q.When is Extreme Networks’ acquisition of Brocade’s data center assets expected to be finalised?
When is Extreme Networks’ acquisition of Brocade’s data center assets expected to be finalised?
The acquisition is anticipated to close within 60 days following the completion of Broadcom’s purchase of Brocade. Broadcom's acquisition is due to be finalised during the quarter ending in July.
Q.How much new annual revenue does Extreme Networks expect from this purchase?
How much new annual revenue does Extreme Networks expect from this purchase?
Extreme Networks expects the acquisition of Brocade’s data center networking business to generate over $230 million in new annualised revenue. They also project the purchase to be earnings accretive by fiscal 2018.
Q.Why is Broadcom divesting Brocade’s IP networking business?
Why is Broadcom divesting Brocade’s IP networking business?
Broadcom announced its intention to divest Brocade’s IP networking business as part of its planned acquisition of the vendor. This allows Broadcom to focus on Brocade’s remaining fibre channel storage area network business.
Q.What is the strategic aim of Extreme Networks with this acquisition?
What is the strategic aim of Extreme Networks with this acquisition?
Extreme Networks aims to significantly strengthen its position in the expanding high-end data centre market. The purchase reinforces its strategy of delivering software-driven networking solutions focused on enterprise customers.
Reader pulse
Is Extreme Networks' acquisition strategy sound?
21,483 votes so far