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Juniper Potentially Going Private? Partners Say It Could Open The Door To New R&D Investments

Recent reports that Juniper hashired Goldman Sachs to explore taking the company private has some partners saying such a move could be a boon to their business.

Recent reports that Juniper Networks hired Goldman Sachs to explore taking the company private has some partners saying such a move could be a boon to their business.

"If they go private, there would be more investment opportunities in technology, whether it’s acquisitions or engineering of the existing technologies to really make them that much better, so I definitely see an upside for the channel," said Dominic Grillo, executive vice president of Atrion Communications, a Branchburg, N.J.-based solution provider and longtime Juniper partner.

"We do a lot with Blue Coat [Systems] and once they went private and Thoma Bravo bought them, all of a sudden there was a lot more money and they acquired a whole bunch of other companies and really filled out their portfolio. [We then] had a much bigger solution to sell compared to point products," Grillo said.

Sunnyvale, Calif.-based Juniper reportedly hired Goldman Sachs as an adviser to assist it in handling offers to take the company private at $32 per share, according to Light Reading and the website Benzinga. Juniper's stock was trading at $31.45 per share as of 2 p.m. EST Thursday, up from $28.50 on Oct. 5.

[Related: CRN Exclusive: Juniper CEO On Beating Cisco Through 'Openness,' Its HP/Aruba Relationship And Enterprise Channel Push ]

Elliott Management, which owns a 4.5 percent stake in Juniper, reportedly agreed with the plan to go private. The networking company has been publicly traded since 1999.

Juniper did not respond to CRN's request for comment by press time.

Chris Becerra, president and CEO of Terrapin Systems, a San Jose, Calif.-based solution provider and Juniper partner, said going private would open up more R&D innovation to better position Juniper against competitors such as Cisco Systems and Arista Networks.

"You’ve got Cisco on the larger end with more money, then you’ve got guys like Arista on the smaller side who are nimble and more focused. So both of them are very hard to keep up with in terms of product advancements, and if they're thinking about dumping more into R&D in with going private it would help," said Becerra. "They wouldn't be as exposed to the street quarter after quarter …. [as] you are as a publicly traded company."

Zeus Kerravala, principal analyst at ZK Research, said going private would allow a company like Juniper to make some tough decisions to advance its business. For example, he said recent rumors have Juniper possibly selling its security business if it goes private.

"There's been some speculation they could sell off their security business and use that money to bolster the carrier business. If you need to make decisions like that, most times it's easier to do that when you're private," said Kerravala.


As an example, ZK Research's Kerravala said Dell going private in 2013 helped pave the way for its planned $67 billion acquisition of EMC.

"Juniper's not in a dire situation like Dell was when the PC business was crumbling or like when Avaya went private," he said. "I think it's really the enterprise business that needs a little attention."

PUBLISHED NOV. 5, 2015

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