Extreme Networks will move forward with its $100 million acquisition of Avaya’s networking business. Extreme made the offer back in March, but had to wait to see if other bidders emerged. This week, the company received approval from a U.S. bankruptcy court to go forward with the purchase.
According to a press release from Extreme, the acquisition is expected to close around the first of July. The company anticipates that the purchase will generate $200 million in revenue for Extreme in fiscal year 2018.
In March, Extreme president Ed Meyercord said Avaya had more than a thousand customers of its Fabric Connect technology. He pledged a “business as usual” approach to Avaya’s product roadmap and sales in the near term to those customers.
Get Big Or Go Home
Extreme’s Avaya bid is part of a broader move to buy its way to growth. The company is also involved in the purchase of data center network assets from Brocade. This purchase is expected to proceed soon after Broadcom completes its acquisition of Brocade. The chip maker, which bought Brocade for its Fibre Channel business, has promised to sell off Brocade’s IP networking business.
Last year, Extreme spent $55 million to acquire Zebra Technologies, an enterprise WLAN provider, augmenting the WLAN portfolio it picked up from Enterasys.
Extreme has predicted that the combined revenue from these acquisitions will help drive the company to a billion dollars of revenue in fiscal 2018.
However, the company has serious integration work ahead of it, both from an organizational and technological standpoint. The company will have to knit together sales teams, consolidate business operations, and eliminate redundant positions.
On the technology front, the company will eventually have to decide whether and how to consolidate a switching portfolio that now encompasses three separate operating systems and any number of hardware models.
Whatever challenges lie ahead, you can’t fault Extreme for being timid; the company is making a bold move to grab revenue, capture market share, and catapult itself into the upper ranks of the networking industry.