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Zebra Technologies to Sell Wireless LAN Business to Extreme Networks

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Extreme Networks and Zebra Technologies Corporation have announced that Extreme will acquire Zebra’s wireless LAN (WLAN) business in an all-cash transaction. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions including regulatory approvals.

“Combining Zebra's WLAN technologies and marquee retail, transportation and logistics, and hospitality customers with Extreme Networks' wired and wireless capabilities, recognized as visionary in the Gartner Magic Quadrant, creates the industry's number three WLAN enterprise campus powerhouse,” said Ed Meyercord, President and CEO, Extreme Networks. “WLAN is the fastest growing segment in the networking industry. Our heritage of delivering innovative and pioneering technology is reinforced with today's announcement, underscoring our commitment to providing customers worldwide with unified visibility and control across their wired and wireless networks.”

This acquisition will strengthen and expand Extreme’s end-to-end, wired and wireless software-driven networking solutions and complements its vertical market focus. Extreme will acquire customers, personnel and technology assets from Zebra. The acquisition positions Extreme Networks as a leader across the hospitality, education, healthcare, manufacturing and state and local government markets and extends the company into new verticals such as retail, transportation and logistics, and broader hospitality, creating additional opportunities for growth.

“The WLAN business is an ideal fit with Extreme Networks as a pure play networking company, and we are proud of our WLAN employees for the contributions they have made to Zebra and will make in the future,” said Anders Gustafsson, CEO of Zebra Technologies. “This transaction enables us to increase our focus on delivering the best Enterprise Asset Intelligence solutions, in collaboration with our partners that give our customers real-time visibility into their operations so they can make smarter decisions. We continually evaluate our business to ensure we are focusing on the areas which generate the strongest growth and highest return profiles, and today's announcement exemplifies that commitment to our shareholders.”

Through the acquisition, Extreme Networks will add in-house Managed Services capabilities to its existing offerings, providing broader options for all customers of the combined business. Extreme Networks expects the transaction to be accretive to cash flow and earnings for its fiscal year 2017 and expects to generate over $115 million in annualized revenue from the acquired WLAN assets.

The transaction purchase price is $55 million. Extreme expects to fund the transaction with a combination of cash on hand along with fully committed financing available under its credit facility, which is being expanded in connection with this transaction. Moelis & Company LLC is acting as financial advisor and Kirkland & Ellis LLP is acting as legal advisor to Zebra Technologies Corp. Latham & Watkins LLP is acting as legal advisor and Cowen and Company provided a fairness opinion to Extreme Networks.



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