Riverbed snaps up Mazu for $25M

Riverbed Technology will pay $25 million to acquire a Massachusetts company in its effort to improve its Wide Area Network optimization products.
Mazu, which is based in Cambridge, will become a business unit of Riverbed, which is based in San Francisco.
Along with announcing the acquisition, Riverbed also released preliminary fourth quarter results for 2008. The company said that it expects revenue of $91 to $92 million, a 20% increase when compared to the final quarter in 2007. The company’s stock was up more than 12% on the news.
Along with the $25 million Riverbed will pay for Mazu at closing, the company may make additional payments based on future sales performance. Riverbed officials said Mazu provides unique analysis and reporting software for WAN that takes a real-time view of application usage and performance.
Jerry Kennelly, Riverbed CEO and president, said in a statement that enterprises and wireless network providers are looking to reduce costs and leverage technology to streamline business processes.
“The market for WAN optimization is fast becoming more mainstream and increasingly our enterprise and service provider customers are demanding more visibility, reporting and analytics capabilities from us as they seek to deploy more robust infrastructure for managing their global applications,” Kennelly said.
With Mazu, Riverbed can now offer global application performance, reporting and analytics in its suite of WAN optimization products.
“By providing an integrated solution based on Mazu’s market-leading offering, we are able to tailor the reporting to demonstrate the value of optimization, which in turn supports the value of the provider’s service to its customer,” Kennelly said.
The acquisition is dependant upon approval by Mazu’s stakeholders, and the deal is expected to be finalized by this quarter. Riverbed could pay an additional $22 million if Mazu generates $35 million in business in the 12 months following the closing of the acquisition.
The company is expected to release its final numbers for the fourth quarter and its financial results overall for 2008 on Feb. 3.
Article updated Jan. 21 to include information on Riverbed’s quarterly financials.