Networking company Extreme Networks has agreed to acquire Zebra Technologies’ wireless LAN (WLAN) business in an all-cash transaction for $55 million.
The transaction is expected to close in the fourth quarter of 2016 (which is the second quarter of fiscal 2017 for Extreme Networks), subject to customary closing conditions including regulatory approvals.
“Combining Zebra’s WLAN technologies and marquee retail, transportation and logistics, and hospitality customers with Extreme Networks’ wired and wireless capabilities, recognized as visionary in the Gartner Magic Quadrant, creates the industry’s number three WLAN enterprise campus powerhouse,” said Ed Meyercord, President and CEO of Extreme Networks. “WLAN is the fastest growing segment in the networking industry. Our heritage of delivering innovative and pioneering technology is reinforced with today’s announcement, underscoring our commitment to providing customers worldwide with unified visibility and control across their wired and wireless networks.”
“The WLAN business is an ideal fit with Extreme Networks as a pure play networking company, and we are proud of our WLAN employees for the contributions they have made to Zebra and will make in the future,” said Anders Gustafsson, CEO of Zebra Technologies. “This transaction enables us to increase our focus on delivering the best Enterprise Asset Intelligence solutions, in collaboration with our partners, that give our customers real-time visibility into their operations so they can make smarter decisions. We continually evaluate our business to ensure we are focusing on the areas which generate the strongest growth and highest return profiles, and today’s announcement exemplifies that commitment to our shareholders.”
Strategic Fit for Extreme
This acquisition will strengthen and expand Extreme Networks’ end-to-end, wired and wireless software-driven networking solutions and complements its vertical market focus. According to a leading industry analyst firm, the combined WLAN business will be the third largest provider in its combined target markets and fourth largest by market share. Extreme will acquire customers, personnel and technology assets from Zebra.
Zebra WLAN customers will benefit from Extreme Networks’ entire portfolio. The acquisition positions Extreme Networks as a leader across the hospitality, education, healthcare, manufacturing and state and local government markets and extends the company into new verticals such as retail, transportation and logistics, and broader hospitality, creating additional opportunities for growth. All WLAN customers in each vertical market served, regardless of the solutions they own, will have access to Extreme Networks’ award winning ExtremeWorks services offerings. Extreme Networks’ best of breed mobility solutions will be offered to all registered resellers under the Extreme Partner Network program.
Extreme Networks expects the transaction to be accretive to cash flow and earnings for its fiscal year 2017 and expects to generate over $115 million in annualized revenue from the acquired WLAN assets.