An analysis by Lightreading.com:
NOVEMBER 12, 2001
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Juniper, Pacific Broadband Near Deal
Juniper Networks Inc. (Nasdaq: JNPR - message board) is preparing to close its first acquisition ever, according to several sources familiar with the deal. Sources close to the company say that it has signed a deal to buy Pacific Broadband Communications (PBC), a maker of cable network aggregation equipment. The size of the deal is not known at this time, but sources say they believe it will be valued below $200 million.
Pacific Broadband, a 150-employee company based in San Jose, Calif., markets a Cable Modem Termination System (CMTS) designed to upgrade cable systems for data services. Both Juniper and Scientific-Atlanta Inc. (NYSE:SFA) are investors in the company.
While the value or costs of such an acquisition are not likely to be huge, it would be important for several reasons. For one, this is the first acquisition for Juniper and would mark a split from Juniper's primary focus on internal development of routing products. CEO Scott Kriens has reiterated recently that Juniper would continue focusing on routing products. Secondly, it would mark a more aggressive move into edge-routing gear and cable equipment.
Analysts familiar with Juniper and Pacific Broadband say that the deal makes sense for both companies. Juniper has been struggling to gain traction in the edge-router market. The addition of the Pacific Broadband CMTS gear could help them get a foot in the door with cable operators, says Steve Kamman, an analyst with CIBC World Markets.
"Juniper has been looking for a way to break into the edge networking market," he says. "Selling two products into an account could be better than one."
This story will be updated when more details become available.
Ibexx
PS: Edge is where the volume is while core is where the margin is. |
