Tuesday, October 3, 2017

Extreme Will Purchase Data Center Assets Directly From Brocade

Extreme Will Purchase Data Center Assets Directly From Brocade Extreme Networks and Brocade Communications have agreed to a direct purchase of Brocade's data center assets by Extreme. The two companies have signed an agreement to complete the purchase within the next 30 days. The acquisition was supposed to be part of a larger deal in which Broadcom would buy Brocade outright, and then divest the IP networking unit while keeping the fibre channel business. However, the $5.5 billion Broadcom/Brocade deal has dragged on for nearly a year as U.S. and foreign regulators have scrutinized the transaction, in part because of Broadcom's commanding position as a maker of networking silicon. For instance, over the summer the Federal Trade Commission imposed special requirements on Broadcom that requires separate facilities for chips manufactured for Cisco to ensure that Cisco trade secrets don't find their way into Brocade products. This week, Brocade and Broadcom announced that they would extend the acquisition deadline to allow for further review of the deal by the Committee on Foreign Investment in the United States. Both companies anticipate the Broadcom/Brocade purchase to be finalized at the end of November. In the meantime, Brocade will sell its data center business directly to Extreme. The deal should close in early November. Extreme originally offered $55 million for the data center business, and that price isn't expected to change. As part of the deal, Extreme will pick up SLX and VDX switches and SLX and MLX routers, plus Brocade's Workflow Composer software, and other data center software and hardware assets. In addition, Extreme says it plans to retain a majority of Brocade employees from the IP networking unit. Extreme also spent $100 million to acquire Avaya networking assets. The company made its first announcement of an integrated Extreme/Avaya offering this September.

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