Extreme Networks to buy cloud company Aerohive for $272m

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Extreme Networks is moving into cloud management and edge capabilities by taking over Aerohive Networks for $272 million.

Both companies are public – Extreme quoted on Nasdaq and Aerohive on the New York Stock Exchange – so the deal will need shareholders’ approval.

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

David Flynn, president and CEO of Aerohive, said: “This acquisition by Extreme is a major milestone for Aerohive. The role that cloud-managed technology plays in modern enterprises is impossible to overstate – it is where digital transformation is won and lost.”

Meyercord added: “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.”

Flynn said: Aerohive’s expertise and excellence in cloud management and edge technology, combined with Extrem’'s extensive solutions portfolio and continued investment in software and AI for automation, gives our customers the most advanced digital experiences in the market. Together we will push networking into a new era – making infrastructure smarter, more autonomous, and the driver of business value.”

A statement from the two companies said that the acquisition “will provide a strong subscription revenue stream and strengthen Extreme’s position in wireless LAN at a critical technology transition to Wi-Fi 6”.

Extreme said it expects to gain new SD-WAN capabilities, in all expanding its total addressable market by a total of $1 billion in a market with growing at 19% a year.

Extreme expects to fund the acquisition from a combination of available cash and committed debt financing, but that it needs approval from regulators in the US and Germany.