Extreme Networks to acquire Aerohive for US$210 million

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Extreme Networks to acquire Aerohive for US$210 million

Consolidation struck the wireless market once again Wednesday as Extreme Networks revealed plans to scoop up competitor Aerohive Networks for US$210 million.

Extreme said that the deal will strengthen its leadership position in cloud management, wireless networking and SD-WAN. The combination will also boost the company's subscription and services business, according to Extreme.

Via the terms of the transaction, Extreme plans on acquiring all outstanding shares of common stock of Aerohive for US$4.45 per share in cash, which represents an aggregate purchase price of approximately US$272 million. Accounting for Aerohive’s net cash balance of US$62 million at the end of March, the deal is equivalent to an enterprise value of US$210 million, the companies said.

Extreme will gain Aerohive's cloud management and edge capabilities, while also boosting its position in the competitive wireless LAN market. Extreme also expects to gain new SD-WAN capabilities. 

Perhaps most importantly, Aerohive will grow Extreme’s revenue mix to approximately 30 percent from subscription recurring revenue, the companies said.

Aerohive has about 30,000 enterprise customers in verticals including state and local government, education, health care and retail.

Earlier this month, Aerohive introduced a new partner portal built on Salesforce Partner Communities that the company said would better serve its channel partners by offering more efficiency through the entire channel process and enhancing the user experience.

The board of directors at Extreme and Aerohive have already unanimously approved the terms of the agreement. The deal is subject to customary conditions and is expected to close during Extreme's first quarter of the fiscal year 2020.

This article originally appeared at crn.com

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