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Riverbed came up as a WAN optimization vendor, and dominates that segment outright during its 10th year in business. The company has sought to expand beyond WAN optimization and into the broader realm of what it describes as "performance" companies, in that it now offers application delivery networking, virtual server infrastructure, Web content acceleration and a host of other functions. The company reported about $726 million in revenue during its last fiscal year.
OPNET is hardly the first time Riverbed's acquired to expand its presence in a market. In 2011, Riverbed bought smaller companies like Zeus, Aptimize and assets from Expand Networks to increase its ADC, Web content optimization and WAN optimization holdings, and the Cascade products themselves were from a 2009 acquisition of Mazu Networks.
But at nearly $1 billion in value, OPNET is Riverbed's biggest M&A move yet, and initial analyst reaction to the deal on Monday was positive.
"In our opinion, this was the right acquisition at the right time for Riverbed as the company adds a nice tangential growth opportunity into the fold. We believe the synergies between the two organizations are pretty clear both from a product and distribution perspective, which should translate into a "1+1=3" scenario as Riverbed fully digests this acquisition during the course of 2013," wrote FBR Capital Markets researchers Daniel Ives and James Moore in a Monday note.
Ives and Moore said Riverbed needed an "offensive-style" acquisition to diversify its revenue opportunities beyond WAN optimization.
"With the WAN optimization market showing signs of renewed growth over the past few quarters despite choppy macro headwinds, we believe the addition of OPNET will further expand Riverbed's TAM over the coming years and give the combined company numerous cross-sell opportunities in the next generation networking build-out," they wrote.
PUBLISHED OCT. 29, 2012
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