Extreme Networks has reached an agreement to purchase Avaya’s networking business for $100 million. The sale is part of Avaya's bankruptcy process and will help the company realign its focus on unified communications and contact center products.
Kevin Kennedy, president and CEO of Avaya, said in a release that the sale of the networking business to Extreme is part of the company’s assessment of available alternatives, including the sale of some of its assets.
“After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders,” Kennedy said. “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 court-supervised process lists Extreme as the lead bidder while other interested parties will be offered an opportunity to bid before a sale is finalized. If other qualified bids are submitted, an auction process will be conducted, with Extreme's offer set as the starting price.
After meeting necessary regulatory approvals and other customary closing conditions, the sale is expected to close by June 30.
Extreme said it expects Avaya’s business will add more than $200 million in annual revenue and increase its market share, while adding to earnings and cash flow.
In January, Avaya filed for Chapter 11 bankruptcy in an effort to reduce debt. At that time, the troubled vendor made a decision to not sell its call center business.
The Santa Clara-based vendor said that it obtained a $725 million loan to fund its operations during the filing.