The deal is now closed: Extreme Networks is the proud owner of Aerohive Networks.
Aerohive, the No. 2 leader in cloud managed wireless LAN services, is now combined with Extreme Networks, the No. 3 provider of enterprise networking equipment, the two companies said Friday.
Extreme Networks first revealed plans to buy Aerohive Networks, a competitor, for $210 million in June. The company said that the deal would strengthen its leadership position across cloud management, wireless and edge networking, and SD-WAN.
[Related: Extreme Networks Elements Can Help Partners Create Future-Focused Autonomous Networks]
Via the terms of the transaction, Extreme Networks has acquired all outstanding shares of common stock of Aerohive for $4.45 per share in cash, which represents an aggregate purchase price of approximately $272 million. Accounting for Aerohive’s net cash balance of $62 million at the end of its fiscal first quarter, the deal is equivalent to an enterprise value of $210 million.
Newly combined with Aerohive, Extreme Netwroks can now offer customers and channel partners more choices for cloud and on-premises wired and wireless technology, including Wi-Fi 6 -capable products, from a single vendor and support team, the company said in a statement. Extreme Networks is also gaining new SD-WAN capabilities.
Gordon Mackintosh, vice president of worldwide channels at San Jose, Calif.-based Extreme Networks, told CRN that the company has always had a strong, strategic focus on the channel and that Aerohive shares this dedication.
"The acquisition broadens Extreme Networks’ solutions portfolio, adding mature cloud solutions, new SD-WAN capabilities, and strengthening our Wi-Fi 6 offering, which will open up new sales opportunities for the channel and give partners an opportunity to streamline the vendors they work with," he said. "We are excited at the possibilities this combined portfolio will bring.”
The Aerohive purchase will also help grow Extreme Networks’ all-important subscription-based revenue mix to approximately 30 percent from subscription recurring revenue, the companies said.
"From a financial perspective, Aerohive's platform is a critical component in our strategy to add subscription-oriented SaaS and cloud-based solutions that will enable us to drive recurring revenue and [improve] cash flow generation," Extreme Networks President and CEO Ed Meyercord said in a statement about the deal.
Milpitas, Calif.-based Aerohive has about 30,000 enterprise customers in verticals including state and local government, education, health care and retail. The company does 100 percent of its business through the channel.
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