Extreme Networks and Avaya Networks have jointly announced an agreement in which Extreme will purcahse Avaya’s networking business for about $100 million.
Extreme anticipates that the purchase will add $200 million in revenue for the company. In a conference call with investors, Extreme President and CEO Ed Meyercord said the purchase allows Extreme to grow its market share. He noted that Avaya has more than a thousand customers for its Fabric Connect technology.
“It helps for us to have more reference accounts, more size and scale, and more cross-selling opportunities,” said Meyercord.
He also noted the loyalty of Avaya customers and wanted to reassure them that Extreme would continue to invest in Avaya, and that in terms of product roadmap and sales it would be “business as usual” in the near term.
“From a product perspective, we want to keep Avaya selling their technology and solutions.”
“We’ll look to integrate and combine the technology roadmap and product portfolio over the next few years,” he said. Extreme sees opportunities to integrate from the network edge, particularly around wireless, into the data center.
In particular, the company sees opportunities to sell its control, analytics and management software suites into Avaya customers.
When asked if the bankruptcy had affected the business climate for Avaya, Meyercord acknowledged that it does put stress on sales. “We suspect there are people waiting on the sidelines to see where the Avaya business lands.”
Both companies target similar verticals, including healthcare, government, hospitality, and education.
Making A Bid
This January, Avaya filed for Chapter 11 bankruptcy. The networking business is being sold under section 363 of US bankruptcy law, which means that the unit is being put up for auction.
Extreme Networks is the first bidder, but it is possible that a competing bid could be made by another party. If so, the auction floor would be set at $100 million. The entire process is expected to be complete in the next three to four months.