US-based wide area network (WAN) optimisation specialist Riverbed Technology is to acquire its application performance management (APM) focussed peer Opnet for approximately US$1bn.
Under the terms of the transaction, Riverbed is offering Opnet…
US-based wide area network (WAN) optimisation specialist Riverbed Technology is to acquire its application performance management (APM) focussed peer Opnet for approximately US$1bn.
Under the terms of the transaction, Riverbed is offering Opnet shareholders US$43 per share split between US$36.55 in cash and 0.2774 of a Riverbed share. The offer represents a premium of around 33% on Opnet’s share price prior to the announcement.
Riverbed stated that the cash portion of the offer consideration will be financed through existing cash on hand and new debt. The company has already received commitments from Morgan Stanley and Goldman Sachs for a US$500m three-year senior secured bridge term loan facility to support the deal.
The offer period ends 23 November and Opnet’s founders and majority owners Alain and Marc Cohen have already agreed to tender their shares and vote in favour of the merger.
The transaction is expected to close prior to 31 December 2012, after which Opnet would be combined with Riverbed’s Cascade business unit. The merged operation is expected to generate annualised revenue of over US$250m.
Commenting on the deal, Riverbed’s chairman and CEO Jerry Kennelly said: “The addition of Opnet establishes Riverbed as the clear leader in the high-growth and converging application and network performance management markets. This acquisition also transforms Riverbed into a billion dollar revenue company.”
Riverbed stated that the acquisition would enable it to extend its NPM business into the multi-billion dollar APM market. It also prompted industry analysts to predict that similar deals are likely to take place as convergence occurs across the performance management sphere.
Both companies provide a variety of satellite communications solutions with Opnet developing satellite network modelling and simulation products and Riverbed a host of satellite WAN solutions.
Goldman Sachs is financial adviser to Riverbed, with Weil, Gotshal & Manges and Wilson Sonsini Goodrich & Rosati serving as legal advisers. Lazard is advising OPNET with Cooley its legal counsel to OPNET.
