http://seekingalpha.com/article/1693092-extreme-networks-extremely-good-enterasys-deal
Extreme Networks announced that it has reached an agreement to acquire Enterasys. Extreme will pay $180 million in cash for the company.
Enterasys focuses on wired and wireless network infrastructure, as well as security and management solutions. Enterasys has large clients including ING and Comcast, and following a two-year integration effort, operations will be merged with Extreme Networks.
The 933 employees of Enterasys will be added to Extreme Networks creating a company with almost 1,700 employees.
The acquisition brings strong wireless LAN, network management and security technologies. Combined with increased research and development efforts it will accelerate the future ambitions of the combined company. CEO Chuck Berger commented on the deal:
Our number one priority in combining these companies is to ensure an even more positive customer experience, preserving the value of their current investment, avoiding any disruption and delivering products and technologies that combine the best of both companies.Enterasys generated trailing revenues of around $340 million over the past 12 months. As such the deal values the company at little over 0.5 times annual revenues.
Extreme Networks will finance the purchase with $105 million in cash and $75 million from a new credit line. The deal will be accretive to non-GAAP earnings in 2014, and will result in positive cash flows from operations
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