JDSU to expand enterprise/data center test play with Network Instruments acquisition

JDSU (NASDAQ: JDSU and TSX: JDU) says it will expand its test and measurement portfolio in the enterprise/data center/cloud arena through the acquisition of Network Instruments. The two parties have signed a definitive agreement that calls for JDSU to pay $200 million in cash, subject to certain adjustments, for Network Instruments. The companies expect to close the transaction, which is subject to customary regulatory approvals, within approximately 45 days.

Network Instruments’ offerings include the Observer Monitoring Platform, GigaStor Retrospective Analysis Appliance, and Matrix Network Monitoring Switch. JDSU asserts the acquisition will expand the addressable market for the company’s Network and Service Enablement business segment by more than $1 billion in markets growing at nearly 13%. These markets include application-aware network performance management and network packet broker markets.

In addition to the products, the acquisition also will garner JDSU research and development, sales, marketing, and production teams with what JDSU described as “decades of experience and proven success in the enterprise market.” Network Instruments has approximately 125 employees and had annual revenue of approximately $40 million for the trailing 12 months. JDSU expects the transaction to be accretive to earnings on a non-GAAP basis starting in the fourth quarter of FY14.

“Network Instruments has outstanding new products and an excellent reputation across the enterprise market with nearly 20 years of experience and strong customer relationships,” said David Heard, president of the Network and Service Enablement business segment at JDSU. “We’re excited to add their talented team and winning solutions to JDSU and look forward to leveraging their expertise to further improve network performance for both our telecom and enterprise customers.”

“The acquisition of Network Instruments by JDSU will provide our customers with considerable benefits,” added Douglas Smith, president, CEO, and co-founder of Network Instruments. “JDSU’s commitment to product innovation and its leadership position with service providers will provide Network Instruments with a strong entry into the carrier market for performance management solutions. In turn, our robust product line and strong relationships with our enterprise channel partners will benefit JDSU as we bring our products under the JDSU brand.”

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