Extreme to Buy Cloud WiFi Pioneer Aerohive for $210 Million
Extreme is buying WiFi company Aerohive for $210 million for its cloud WLAN skills and SD-Branch evolution.
Extreme's Chief Marketing, Development, and Product Operations Officer Norman Rice said that the Aerohive buy would gain Extreme "20,000 to 24,000 net new customers." He says customers will be gained in areas such as retail banking, fast-service restaurants and local education.
A major difference between Aerohive and Extreme is that Extreme handles 98% of its own WLAN as "on-prem WiFi." Aerohive, meanwhile, is big on cloud WLAN management. Cloud management lets you manage an entire wireless network from a single interface.
"Extreme's WiFI is our on-prem WiFi. Aerohive is our cloud WiFi," Rice says.
Rice said that the Aerohive acquisition would help Extreme with "the evolution of SD-WAN to SD-branch." SD-Branch technology covers a hardware platform that supports SD-WAN, routing, integrated security and LAN/Wi-Fi functions that can be managed centrally.
Extreme will acquire all of the outstanding shares of common stock of Aerohive for $4.45 per share in cash, representing an aggregate purchase price of approximately $272 million. Accounting for Aerohive’s net cash balance of $62 million at the end of March, the deal is equivalent to an enterprise value of $210 million.
Extreme expects the acquisition to be accretive to non-GAAP earnings per share starting in fiscal year 2020.
— Dan Jones, Mobile Editor, Light Reading