Extreme Networks to buy Zebra Technologies wireless business
Staff Writer |
Extreme Networks will acquire Zebra Technologies Corporation's wireless LAN (WLAN) business in an all-cash transaction.
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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.
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 will continue to invest in the newly acquired technology which will bolster the company's software-driven solutions portfolio which includes ExtremeWireless, ExtremeManagement, ExtremeControl, ExtremeAnalytics, ExtremeSwitching and ExtremeCloud.
With significantly broadened capabilities, these solutions will leverage the acquired business' software technologies including the WiNG wireless operating system, NSight advanced network troubleshooting, service assurance and vendor-agnostic AirDefense solutions.
Through the acquisition, Extreme Networks will add in-house Managed Services' capabilities to its existing offerings, providing broader options for all customers of the combined business.
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.
The sale of the WLAN business is expected to have an immaterial impact to Zebra's adjusted EBITDA margin.
The company anticipates the transaction will be dilutive to earnings in the fourth quarter of 2016. Net proceeds from the sale will be used to pay down debt.
Zebra expects to provide any updates to its full-year outlook during its third quarter earnings release in November. ■