NetScreen Shells Out $265M For Neoteris

Under terms of the deal, NetScreen will pay about $245 million in stock and $20 million in cash at the closing, which is slated to happen before the end of the year. If certain revenue milestones are reached, NetScreen will pay an additional $30 million to Neoteris stockholders and option holders. No timeframe was provided for those milestones. Both companies are based in Sunnyvale, Calif.

David Flynn, vice president of marketing for NetScreen, said the Neoteris product line will round out his company's VPN offerings and its ability to address NetScreen customers that have remote-access and partner extranet concerns.

The SSL-based remote access market is projected to reach $600 million in annual revenue by 2006, according to market research firm Infonetics Research.

There is no plan to integrate the Neoteris technology into NetScreen's existing line of site-to-site VPN appliances. "Customers don't see the SSL VPN technology as living inside the firewall," Flynn said.

Rather, NetScreen will integrate the Neoteris appliances at the management console level sometime next year, he said. Neoteris brings NetScreen new management capabilities in terms of forms- and header-based Web single sign-on and password management integration.

Flynn said existing Neoteris devices will be marketed with a dual brand for a while, but eventually will bear the NetScreen brand name.

The two companies share a common channel philosophy. Appropriate NetScreen partners will be given the opportunity to sell both product lines, but the company will continue to keep a tight rein on its channel ranks and distribution strategy, Flynn said.