Juniper Networks entered into an agreement to sell its Junos Pulse portfolio, the networking company's mobile security suite, to Siris Capital for $250 million, the company said in its second-quarter earnings report Tuesday.
"Pulse is a good asset. The issue is that it's not in line with our strategy, which is very much focused on cloud and High-IQ networks and how those markets are shaping," Juniper CEO Shaygan Kheradipir said in a conference call with analysts Tuesday.
The move better aligns the vendor with where it sees opportunities in security products around those markets, Kheradipir said.
The Junos Pulse deal is in line with restructuring and cost-cutting plans Kheradpir laid out last quarter to focus the company around cloud and "highly intelligent" networks, in response to intense shareholder pressure. Juniper said at the time that the "integrated operating plan" (IOP) could include the company reevaluating its product line.
"We are making the pivot fully to our stated high-growth strategy of cloud builder and High-IQ networks ... and we are shifting our resources," Kheradpir said.
Siris Capital is a New York City-based private equity firm focuses on data, telecom and technology investments. Siris Capital also owns fault-tolerant hardware and software company Stratus Technologies. The companies said they will work together in the transition to ensure customers and partners are fully supported.
Juniper took a step in a new direction in 2010 when it when it entered the mobile security space with the launch of Junos Pulse. The Junos Pulse software was built on Juniper's existing SSL VPN product and capabilities include remote backup and data restoration, lost device location, network access control (NAC) and collaboration capabilities.
Juniper said Q2 product revenue for Junos Pulse was $15.9 million with an additional $15.5 million in services revenue. Product revenue fell from $19.3 million in the same quarter last year, a 21 percent drop.
Juniper posted second-quarter sales of $1.2 billion, up 7 percent from the year-ago period. Net income for the quarter was $221.1 million, up 125 percent from a year ago.
The restructuring efforts cost the company $72 million, including $10 million for headcount-related restructuring actions, which are "largely completed." Headcount for the company was down 5 percent over the same quarter the year before, the company said. That brings total restructuring costs to $194 million.
Juniper said it expects third-quarters sales in the range of $1.15 billion to $1.2 billion.
The company said it expects customer-specific dynamics to impact earnings with some of that offset by emerging vertical demand. It expects adjusted net income for the third quarter to be in the range of $166.25 million to $190 million.
The acquisition is expected to close in the third quarter.
PUBLISHED JULY 22, 2014