& cplSiteName &

Avaya Offloads Its Networks Biz to Extreme for $100M

Iain Morris
3/8/2017
50%
50%

Ailing Avaya has revealed it will sell its networks business to Extreme Networks for about $100 million.

Avaya Inc. filed for bankruptcy protection in January amid reports that it was struggling to cope with the ongoing shift in value from hardware to software and services. (See Ailing Avaya Takes Cover From Bankruptcy.)

The company hopes to reduce its debt load through the sale of various assets but appears determined to cling on to its unified communications and contact center businesses.

However, the deal with Extreme Networks Inc. (Nasdaq: EXTR) seems unlikely to have a major impact on Avaya's balance sheet, which showed debts totaling more than $6 billion at the end of December.

Last month, Avaya reported revenues of $875 million for the final three months of 2016 -- 8.7% lower than in the same period of 2015 -- and saw its net loss widen from $27 million to $102 million over the same period.

San Francisco-based Extreme Networks said the acquisition of Avaya's networks unit -- Ethernet switches, WLAN gear, security and infrastructure management tools -- would strengthen its capabilities in the enterprise sector and provide "accretion" to its earnings and cash flow in 2018.

"The addition of Avaya's networking business is consistent with our growth strategy and will broaden Extreme's enterprise solutions capabilities by complementing our product portfolio across our vertical markets," said Ed Meyercord, Extreme's president and CEO, in a company statement. "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."


Want to know more about the emerging SDN market? Check out our dedicated SDN content channel here on Light Reading.


Extreme, a company best known for its Ethernet switching expertise but which has had a relatively low profile in the market of late, says its main focus is on providing software-based networking products and services to IT departments across a range of industry sectors.

Extreme's revenues rose by 6.3% in the last three months of 2016, to $148 million, compared with the year-earlier quarter, but the company's net loss also widened over that period, growing from $7.2 million to $8.6 million.

Avaya expects the deal to close by June this year, although competing bids from other parties could trigger an auction of the assets.

In that instance, says Avaya, the deal with Extreme would set "the floor value for the auction."

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
June 26, 2018, Nice, France
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Telco Job Prospects Go From Bad to Worse
Iain Morris, News Editor, 6/22/2018
Larry Ellison Laughed at the Cloud, Now the Cloud Is Laughing Back
Mitch Wagner, Executive Editor, Light Reading, 6/20/2018
Mavenir's Billion-Dollar Blueprint
Ray Le Maistre, Editor-in-Chief, 6/18/2018
5G Transport – Where Do We Start?
Ray Le Maistre, Editor-in-Chief, 6/21/2018
Animals with Phones
Backing Up Your Work Is Crucial Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed