Extreme Networks this week said it had agreed to acquire wireless networking specialist Aerohive in a bid to add cloud management and edge capabilities to its portfolio of networking solutions. The cash deal is worth $210 million, with an aggregate purchase price of $272 million offset by Aerohive’s first-quarter cash balance of $62 million, officials said.
The Lowdown: Purchasing Aerohive gives Extreme a strong subscription revenue stream and strengthens its position in wireless LAN at a time when many in the industry are transitioning to the faster and more efficient Wi-Fi 6 standard (also known as 802.11ax). Aerohive last year debuted three Wi-Fi 6 access points along with a pluggable access point.
The Details: Aerohive currently has 30,000 cloud wireless LAN customers in verticals including education, health care, state and local government, and retail, officials said. In addition to the cloud services and Wi-Fi 6 offerings, the deal will give Extreme added automation and intelligence capabilities and significant new SD-WAN capabilities.
The acquisition is expected to close during Extreme’s first quarter of the fiscal year 2020.
The Buzz: “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 Extreme Networks CEO Ed Meyercord. “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.”
“This acquisition by Extreme is a major milestone for Aerohive,” said David Flynn, president and CEO of Aerohive. “The role that cloud-managed technology plays in modern enterprises is impossible to overstate. It’s where digital transformation is won and lost.
“Aerohive’s expertise and excellence in cloud management and edge technology, combined with Extreme’s extensive solution portfolio and continued investment in software and AI for automation, gives our customers the most advanced digital experiences in the market,” Flynn added. “Together we will push networking into a new era – making infrastructure smarter, more autonomous, and the driver of business value.”
