Extreme Networks, Inc (NASDAQ:EXTR) acquires Enterasys Networks


Dallas, Texas 10/02/2013 (Financialstrend) – Extreme Networks, Inc (NASDAQ:EXTR) is a network infrastructure equipment provider for enterprises in the health care, education and others related sectors. Its most recent announcement is the acquisition of another company- Enterasys Networks, likely to cost the company $180 million.

 Enterasys, in turn, is a security and network infrastructure solution provider and the move is aimed at ensuring Extreme Networks own network operating system, the “ExtremeXOS” will soon be available on Enterasys network OS platforms as well. Enterasys had reported annual revenue of $330 million over the trailing 12 months basis and employees nearly 900 people.

 Over duration of two week, after the merger announcement was made, the firm’s share rose by over 7%. EXTR has close to $205.6 million in cash and other equivalent securities. In the past one year it had reported sales of close to $299.3 million which was down 7.2 % in comparison to previous year.Net income too has dropped in the past year, by 40% bringing in $9.7 million only. Extreme Networks currently does not pay any dividend and trades at $4.30 and is considered to have a market value of $410 million.

 As of close of business on October 1, the stock was trading at $5.2 per share. It is trading just half a percentage point lower than its 52 week high valuations. The Extreme Networks and Enterasys Networks combination follows other deals it has already made with companies such as Lenovo as well as EMC. EXTR has also restructured the management levels as well. Chuck Berger is the current CEO while Ed Carney, an ex-IBM and Cisco Systems person is in-charge of managing product development.

 Extreme Networks Inc. in expansion mode and is poised for immense growth in the next few years in networking for enterprises domain.

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