San Jose, CA /PRNewswire/ - Extreme Networks, Inc. ("Extreme") (NASDAQ: EXTR) today announced it has entered into an asset purchase agreement with Avaya Inc. to acquire its networking business. Under the terms of the agreement, the assets of Avaya's networking business unit will be sold to Extreme for approximately $100 million, in accordance with the terms and conditions of the asset purchase agreement.
"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," stated Ed Meyercord, President and CEO of Extreme Networks. "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. Although our agreement is subject to required approvals, the timing of which is uncertain, we expect the combined businesses can achieve synergies and provide accretion to Extreme's fiscal 2018 earnings and cash flow."
Avaya announced it filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code on January 19, 2017. This agreement will constitute a primary bid for the networking business in a sale process being conducted under Section 363 of the U.S. Bankruptcy Code. As the stalking horse bidder, Extreme will be entitled to a break-up fee and expense reimbursement, if it ultimately does not prevail as the successful bidder at the required auction for Avaya's assets. The auction process and final agreement will be subject to the approval of the United States Bankruptcy Court for the Southern District of New York. In addition, completion of the transaction remains subject to customary closing conditions and regulatory approvals. The auction process and transaction closing are expected to conclude within 3 to 4 months.
Extreme Networks will host a conference call at 4:30 p.m. Eastern / 1:30 p.m. Pacific today to discuss this announcement. The conference call will be available to the public through a live audio web broadcast via the Internet at http://investor.extremenetworks.com. The conference call may also be heard by dialing 1-877-303-9826 (international callers dial 1-224-357-2194). The encore recording will be available until March 14, 2017 and can be accessed by dialing (855) 859-2056 or international 1 (404) 537-3406 with the conference ID # 83937656.
About Extreme Networks
Extreme Networks, Inc. (EXTR) delivers software-driven networking solutions that help IT departments everywhere deliver the ultimate business outcome: stronger connections with customers, partners and employees. Wired to wireless, desktop to data center, on premise or through the cloud, we go to extreme measures for our customers in more than 80 countries, delivering 100% insourced call-in technical support to organizations large and small, including some of the world's leading names in business, hospitality, retail, transportation and logistics, education, government, healthcare and manufacturing. Founded in 1996, Extreme is headquartered in San Jose, California. For more information, visit Extreme's website or call 1-888-257-3000.
Extreme Networks and the Extreme Networks logo are either trademarks or registered trademarks of Extreme Networks, Inc. in the United States and/or other countries. Other trademarks are the property of their respective owners.
Forward Looking Statements
Except for the historical information contained herein, the statements in this release, including those concerning Extreme's business outlook, future financial and operating results, and overall future prospects are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements speak only as of the date of this release. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: our ability to consummate the acquisition of Avaya's networking business in the bankruptcy process; failure to achieve targeted revenues and forecasted demand from end customers; a highly competitive business environment for network switching equipment; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; and a dependency on third parties for certain components and for the manufacturing of our products.
More information about potential factors that could affect Extreme's business and financial results is included in Extreme's filings with the U.S. Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors". Except as required under the U.S. federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, Extreme Networks disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.
SOURCE: Extreme Networks, Inc.Copyright 2017 PR Newswire. All Rights Reserved