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Enterasys, Formerly Cabletron, Accepts $386 Million Buyout

Posted by inet - 2005-11-17

Enterasys Networks Inc., a successor to Cabletron Systems Inc., has agreed to be bought out by two Southern California private equity firms. The buyout by Gores Group LLC of Los Angeles and Tennenbaum Capital Partners LLC of Santa Monica was for $386 million, Enterasys said Monday.

"This transaction provides our shareholders with a substantial premium over the current market and enterprise values of the company," Mark Aslett, president and chief executive officer of Enterasys, said in a statement. "The price reflects our success in repositioning Enterasys and returning it to a solid operational and financial position, as demonstrated by our strong Q3 results.

In recent months, the firm, formerly headquartered in New Hampshire, but now in Massachusetts, has posted improved financial results. In its third quarter reported Oct. 26, Enterasys reported a 5 percent revenue growth and net income of $72. 9 million.

Over its history, the company’s stock was on a roller coaster hitting $214 at the height of the technology bubble in the late 1990s and then dropping below $1, after an accounting scandal, which resulted in the ouster of several former top executives, rocked the company. The buyout is at $13.92 a share.

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