UPDATED 22:02 EDT / MARCH 07 2017

INFRA

Avaya agrees to sell its networking business to Extreme Networks for $100M

Troubled business communications company Avaya Inc. has agreed to sell its networking business to Extreme Networks Inc. for $100 million as part of its efforts to battle its way out of bankruptcy.

Avaya, which filed for Chapter 11 bankruptcy in January in an effort to reduce its debt load of about $6.3 billion, entered the networking business when it acquired Nortel Enterprise Solutions in 2009 for $900 million. That suggests that a fire sale has potentially resulted in a massive $800 million writedown on the value of the division.

San Jose-based Extreme Networks designs, builds, and installs Ethernet networks. It sees the acquisition of Avaya’s networking business as aligning with its growth strategy, helping to broaden the company’s portfolio across vertical markets.

“We believe that a sale of our Networking business is the best path forward for all stakeholders,” Avaya Chief Executive Office Kevin Kennedy said in a statement. “It provides a clear and positive path for our Networking customers and partners and enables the Company to focus on its core, industry-leading Unified Communications and Contact Center solutions. ”

The deal may not be final, because the bankruptcy process allows other companies to bid for the division. The Register noted that Extreme Networks’ offer will set the floor price should others wish to enter their own bids.

Extreme Networks Chief Executive Officer Ed Meyercord said that he believes that Avaya’s networking business will generate over $200 million annually if it’s successful with the acquisition. Approval of a final sale to Extreme or a competing bidder will happen shortly after completion of an auction, Avaya noted, saying it expected the transaction close by June 30.

Photo: SpudMcCoy/Wikimedia Commons

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU