Extreme Networks snaps up rival Aerohive for $272 million

Extreme looks to Aerohive’s automation capabilities to expand edge-to-cloud networking offering

Networking equipment vendor Extreme Networks has announced it will acquire rival Aerohive.

In a press release, Extreme said the acquisition will add important cloud management and edge capabilities to the company’s portfolio, as customers increasingly demand connectivity from the edge to the cloud.

Extreme will acquire all outstanding Aerohive common stock shares for $4.45 (£3.5) per share in cash, representing an aggregate purchase price of approximately $272 million (£214m). Accounting for Aerohive’s existing cash balance, the deal is equivalent to an enterprise value of $210 million (£165m).

Aerohive is the second largest provider of cloud managed Wireless LAN services, according to IHS Markit analysis, with a footprint of 30,000 customers across education, state government and retail – verticals that Extreme hopes to expand into.

Extreme also expects the acquisition to expand its revenues by approximately 30 percent from subscription recurring revenue.

“The acquisition of Aerohive establishes our leadership in cloud, AI, and ML, adding a proven and mature cloud services platform and subscription service model for Extreme’s customers and partners,” said Ed Meyercord, president and CEO of Extreme Networks.

“Extreme continues to invest in software and AI to expand the automation capabilities across our portfolio of edge-to-cloud networking solutions. The ability to improve user experiences, lower operating expenses, and deliver cloud-managed networks is key to our strategy.”

Extreme expects the acquisition to close in fiscal year 2020.