This morning, Extreme Networks announced it has entered into an agreement to acquire Enterasys Networks for $180 million in cash. Extreme is funding the purchase by pulling $105 million from its $205 million of cash on hand and then borrowing $75 million from a new credit line established. Extreme will buy Enterasys from the Gore Group, which acquired the company back in 2006 for $386 million. Around the same time, Gore had acquired Siemens Enterprise with the idea of creating an organization that could deliver an “end-to-end” UC-data solution.
The concept was sound, but in practicality, the UC solutions from Siemens Enterprise are widely deployed on Cisco networks. Considering the challenges Siemens Enterprise has encountered while rebuilding its portfolio over the past five years or so, creating any kind of resistance in its customer base is the last thing the company needed. So, instead of pushing a combined Siemens Enterprise/Enterasys solution, the sales force gave customers what they wanted, which was Cisco most of the time.