Here is my personal list of potential acquirers of F-5 with brief notes.
1. Microsoft (288 B. market cap)
---strategy announced Aug. 1 toward development of Microsoft.Net has echoes of F-5 mission statement.
---F-5 and Microsoft both Seattle based
---antitrust problems less an issue with MSFT only 72% the size of Cisco and court trials likely to take years making issues moot
2. Intel (271 B. market cap)
---F-5 and Intel are web traffic rivals but co-rivals of Cisco
---Intel chips are integrated with F-5 products
3. IBM (192 B. market cap)
---new CEO former IBM senior v.p.
---IBM needs to preempt MSFT in this space while antitrust issues cause MSFT to delay acquisitions, or else lose to MSFT yet again
4. Sun Microsystems (179 B. market cap)
---"Hard to find where the SUN don't shine" in the words of MSN Money Central
---F-5 would fit into the expanding networking side of Sun's business
---software engineer culture of F-5 and Sun would mesh
5. Hewlett Packard (90 B. market cap)
---HWP is a major network equipment vendor, too often losing out to Cisco
---FFIV would allow counter to Cisco's Arrowpoint acquisition and Nortel's Alteon purchase
---HWP and FFIV already have working relationship
6. Lucent (78 B. market cap)
---Alex Henderson of Salomon Smith Barney among others pointing out how Lucent needs FFIV
---at one time top contender to buy out FFIV, but failed execution of company strategy makes near-term acquisition difficult. If 2 quarters of meeting earnings expectations, LU might make a play for FFIV if it is still available
7. Dell (71 B. market cap)
---How committed is Dell to its server business?
---FFIV's Big IP is integrated into Dell's Power App. server
Some Europeans:
8. Alcatel (75 B. market cap)
---ALA's network infrastructure interoperability platforms initiative mirrors Microsoft's Microsoft.Net strategy
9. British Telecom (69 B. market cap)
---BTY already has a reseller's licensing agreement with FFIV
10. Siemens
11. Marconi
---All the Europeans above could use a content-aware switching company
12. Electronic Data Systems (23 B. market cap)
---EDS's recent 10 B. Navy contract insinuates them with FFIV, already a supplier of their equipment to the Navy
---EDS has already announced plans to bid on similar Army and Air Force contracts and FFIV is a supplier to NASA
Others have speculated on Cisco, Extreme, Foundry, Cabletron, 3 Com, Akamai and Juniper as potential acquirers.
I think that just because Cisco bought Arrowpoint doesn't rule them out, but the fact that Cisco and F-5 compete so viciously probably does. The others might attempt some kind of merger, but I don't believe they could handle the financing for a takeover, at least not at this time.
Summary: The fact that this list includes so many computer and internet players itself demonstrates F-5's attractiveness. Plus FFIV's growth rate, earnings per share and PE would enhance similar calculations by many acquirers.
Note that F-5's Internet Traffic Management products support a wide range of operating systems and hardware platforms including those from: Sun Microsystems, Hewlett Packard, Compaq, Microsoft, Apple, IBM, and Intel. F5 products work with leading IP-based applications, including legacy host, mainframe, Java, CORBA-based, and client/server applications from vendors such as SAP, BAAN, Novell, Oracle and PeopleSoft. |
