Enterasys Plans To Go Private

Last week, the networking and security vendor said it had signed an agreement to be acquired by investors led by The Gores Group and Tennenbaum Capital Partners. The $386 million deal will turn publicly traded Enterasys into a private company.

“I think there will be a little more customer faith with the additional dollars backing Enterasys,” said Jay McKeever, principal at Atlanta-based solution provider Stormwood.

Enterasys&' competitors over the last several years have latched onto the vendor&'s lackluster financials in attempts to deter customers from buying Enterasys gear, McKeever said.

The company&'s 600 worldwide channel partners should expect “business as usual” from the vendor in the near term, said Jim Harold, vice president of worldwide channels at Enterasys. The vendor is also on schedule to roll out enhancements to its partner program in January that will add “profitability and differentiation” for Enterasys solution providers, Harold said.

The deal should enable the company to achieve both organic growth and growth through future acquisitions, creating “a platform from which Enterasys can now actively participate in future networking industry consolidation,” said Enterasys President and CEO Mark Aslett during a conference call.

“We believe operating as a private company with the financial backing of Gores and Tennenbaum will open doors to market opportunities not available to Enterasys today,” Aslett said.

Enterasys&' senior management team is expected to continue to lead the company, which will maintain its Andover, Mass., headquarters. A spokesman said Enterasys does not anticipate any head count reduction or changes to its product road maps as a result of the acquisition. The company earlier this year cut 30 percent of its workforce.

Enterasys already has a history with Gores, which acquired Enterasys&' Aprisma network management unit in 2002 and sold it to Concord Communications earlier this year. Concord and its Aprisma subsidiary are now owned by CA.