Extreme Networks To Buy Data Center Business From Brocade Communications
(RTTNews.com) - Extreme Networks Inc. ( EXTR ) said that it has signed an asset purchase agreement with Brocade Communications Systems, Inc. ( BRCD ) to purchase the company's Switching, Routing and Analytics or SRA data center business for substantially the same terms as the previously announced agreement between Extreme and Broadcom.
The transaction is expected to close within 30 days and is subject to the satisfaction or waiver of customary closing conditions.
As part of the transaction, Extreme will acquire customers, personnel and technology assets from Brocade, further solidifying Extreme as a top solution provider for enterprises in its target verticals of education, hospitality, healthcare, retail, transportation and logistics, manufacturing and government.
Extreme continues to anticipate the transaction will be accretive to cash flow and earnings for its fiscal year 2018, which began on July 1, and expects to generate over $230 million in annualized revenue from the acquired assets.
Separately, Brocade announced that, following discussions with the Committee on Foreign Investment in the United States or "CFIUS", Brocade and Broadcom Limited withdrew and re-filed their joint voluntary notice to CFIUS to allow more time for review and discussion with CFIUS in connection with the proposed acquisition of Brocade by Broadcom. CFIUS has agreed to proceed directly to a 45-day investigation period, thereby shortening the customary 75-day CFIUS review period.
To allow for the additional CFIUS review period, on October 2, 2017, Brocade and Broadcom agreed to refrain from exercising their right to terminate the merger agreement for failure to close the proposed acquisition by the November 1, 2017 end date under the merger agreement.
The merger agreement remains in full force and effect. Brocade and Broadcom now anticipate the acquisition to be completed by November 30, 2017, subject to clearance from CFIUS.
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