Network appliance maker Riverbed Technology Inc. (RVBD) said Monday that it has come to terms to acquire Opnet Technologies Inc. (OPNT) in a cash and stock deal valued at $1 billion with an enterprise value of $921 million. Riverbed will pay Opnet shareholders $43 per share; payable as $36.55 in cash and 0.2744 of a share of RVBD stock for each share of OPNT owned. The pricing is a 33 percent premium to Opnet’s closing price of $32.10 on Friday.
The cash portion of the transaction will be financed through Riverbed's existing cash on hand and new debt. The deal is expected to close by the end of the year, pending customary approvals.
U.S. stock markets are closed today as Hurricane Sandy, dubbed “Frankenstorm” because of its enormous size, has started to batter the East Coast. It is already anticipated that Wall Street may be shuttered again on Tuesday.
Bethesda, Maryland-based Opnet is a provider of software and services to manage applications and networks. The company will be merging with Riverbed’s Cascade business arm with the combination expected to generate more than $250 million in annual sales. Riverbed reported $726 million in revenue in 2011.
"The addition of Opnet establishes Riverbed as the clear leader in the high-growth and converging application and network performance management markets," said Riverbed Chief Executive Officer and Chairman Jerry Kennelly in a corporate statement. "This acquisition also transforms Riverbed into a billion dollar revenue company."
Riverbed expects the deal to add to adjusted earnings in 2013 and “meaningful revenue” in 2014.
Separately, Opnet reported fiscal second-quarter earnings that came up shy of analyst expectations. The company said that net income tallied $3.9 million, or 17 cents a share, as compared to $4.8 million, or 21 cents per share in the year prior quarter. Revenue rose to $47.1 million from $41.9 million.
Earlier in October, Riverbed forecast strong results for the fourth quarter and analysts expect full-year revenue of $834.8 million.
Shares of Opnet are flat throughout 2012 as of Friday’s close, but have climbed well-off lows of $21.84 in May. Shares of Riverbed have performed similarly with little movement since January 1st, but a sharp rise from lows this summer.
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