Network performance monitoring company NetScout is making a major purchase of communications test and measurement assets, buying Tektronix Communications and some parts of Fluke Networks as well as advanced network threat mitigation company Arbor Networks from international conglomerate Danaher for $2.6 billion in stock.
The transaction will triple the size of NetScout’s workforce and create a communications company with sophisticated network monitoring and threat analysis capabilities, and tie NetScout closely to Danaher. NetScout is making the purchase via 62.5 million shares of its common stock to Danaher, and a Danaher executive will join NetScout’s board.
The transaction includes:
- Tektronix Communications, based in Plano, Texas, which focuses on network service assurance, network intelligence and testing across wireless and wireline networks. This includes TekComms’ VSS Monitoring and Newfield Wireless businesses.
- Security specialist Arbor Networks, based in Burlington, Massachusetts, which focuses on advanced threats and DDoS attacks.
- Everett, Washington-based Fluke Networks’ assets in network monitoring. The purchase does not include Fluke’s data cabling tools or its carrier service provider tools businesses.
NetScout said the transaction will “increase NetScout’s scale and broaden its customer base in both the service provider and enterprise markets, while accelerating [its] entry into the cyber intelligence market.”
“This combination represents another important step, and a major milestone, towards accelerating our ability to compete on a larger and more global scale in the broader IT management and cyber intelligence space, to fully implement our NetScout 3.0 strategy, and to maximize our potential in our total addressable market,” said Anil Singhal, who is co-founder, president and CEO of NetScout, in a statement.
The new combined company is projected to have revenues of more than $1.2 billion, and the transaction is expected to close in the first half of NetScout’s fiscal 2016, which translates to sometime between April-September 2015. Danaher’s communications business had revenues of about $836 million for the year ended on Dec. 31, 2013, and has more than 2,000 employees, compared to about 1,000 employees at NetScout.
Singhal said that the move will “jump-start our planned entry into the Cyber Intelligence market, particularly within the advanced persistent threat area.” Arbor Network specializes in this area, with sophisticated threat detection and analytics.
James Lico, executive VP of Danaher, said that the combination of NetScout’s monitoring technology and Danaher’s assets in troubleshooting, engineering solutions and cyber security “will create the most comprehensive suite of best-in-class solutions in the industry today.”
Lico will be joining NetScout’s board once the transaction is complete.
