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March 30, 2017updated 12 Jul 2022 9:49am

Brocade sells data centre business to Extreme Networks

Extreme Networks to acquire Brocade's data centre business from Broadcom.

By Hannah Williams

Extreme Networks has announced an agreement with Brocade to acquire its data centre switching, routing and analytics business.

Following Broadcom’s acquisition of Brocade, the data centre networking business will be sold to Extreme Networks for $55million in cash, as well as additional potential performance based payments to Broadcom to be paid over a five-year term.

The announcement is the latest in a series of acquisitions that Extreme Networks has announced over the last six months, which work towards expanding the company’s portfolio of data centre, core, campus and edge networking solutions.

Ed Meyercord, President and CEO, Extreme Networks said: “The addition of Brocade’s data centre networking business significantly strengthens our position in the expanding high-end data centre market and reinforces our strategy of delivering software-driven networking solutions focused on enterprise customers.

“As Extreme is the only pure play end-to-end, wired and wireless enterprise IP networking company in the world, we believe Brocade’s data centre customers will benefit from our dedication to delivering high quality, software-driven, secure networking solutions and the industry’s highest rated customer support.”

Read more: Extreme Networks buys Zebra’s WLAN business for $55m

Earlier this month, Extreme announced that it had entered into an agreement with Avaya to be the stalking horse bidder to acquire its networking business in an auction process. The transaction is still awaiting closing conditions and regulatory approvals and is currently anticipated to close within two to three months.

Whilst discussing the acquisition of Brocade’s data centre business, Meyercord said: “Moreover, this acquisition is important as it expands our commercial relationship with Broadcom.

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“We already have our 200 series of value oriented switches leveraging Broadcom’s FASTPATH operating system software and this transaction will only broaden our strategic partnership.

“Finally, given the strong profitability of Brocade’s data centre business, this transaction will accelerate Extreme’s objective gross margins in excess of 60%.”

The transaction is due to close following the closing of the acquisition between Broadcom and Brocade, which is expected to close in the third fiscal quarter ending July 2017.

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