Waiting For Juniper To Make a Move

• Posted by techstockradar
• on November 17th, 2009

Back in April 2005, $JNPR made a big splash in WAN optimization when it paid $337 million in cash and stock for Peribit Networks.

But $JNPR stumbled and wasn’t able to maintain sales momentum for Peribit’s product line. Today it’s a marginalized player in this growing networking segment. On a recent $RVBD earnings call, management said $CSCO was by far its toughest competitor in WAN optimization, followed by $BCSI and $JNPR.

There has been a lot of speculation lately that $JNPR would bid for $RVBD as a way to keep up with $CSCO, which has been scooping up niche networking players, including $STAR.

The argument against this potential acquisition is that $JNPR primarily serves the service-provider market, while $RVBD is focused on selling into the enterprise. But $JNPR has been trying to build out its enterprise SLT business, which accounted for 28% of total revenue in the latest quarter.

$RVBD would be a good technology fit for $JNPR, a company that so far has been watching the latest acquisition wave from the sidelines. $RVBD has a strong product portfolio with its Steelhead appliances and is expected to come in with revenue growth of 16%+ both this year and next.

Admittedly, one obstacle could be price as an estimated 35% deal premium would put Riverbed’s value over $2 billion. But $JNPR needs to start making some moves in this M&A game to stay competitive as its rivals bulk up all around it.

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