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November 01, 2012

Riverbed Technology to Buy OPNET Technologies

Networks and applications are required to work together to deliver the performance that business users demand. However, monitoring, troubleshooting and fixing the application and network performance problems are quite challenging.

In an effort to address this issue, Riverbed Technology – a performance company – will acquire OPNET Technologies Inc., a provider of solutions for application and network performance management, to allow Riverbed to extend its network performance management (NPM) business into the multibillion dollar application performance management (APM (News - Alert)) market.

Delivering performance for the globally connected enterprise, Riverbed allows its clients to implement strategic initiatives such as virtualization, consolidation, cloud computing and disaster recovery.

It provides enterprises the platform they require to understand, optimize and consolidate IT.

According to sources, Riverbed (News - Alert) entered into a definitive agreement to acquire OPNET for $43 per share in cash and stock, representing an equity value of $1 billion and an enterprise value of $921 million.

This transaction is expected to be accretive to Riverbed's 2013 earnings per share on a non-GAAP basis.

Under the terms of this acquisition, Riverbed’s Cascade business unit will be combined with OPNET to create a new force in the converged market for NPM and APM, with more than $250 million USD in annualized revenue.

The OPNET's broad-based family of APM products will now be part of Riverbed’s Cascade business unit.

In addition, this acquisition will allow Riverbed to provide its customers with a unique integrated solution that not only monitors network and application performance, but helps in accelerating it.

Sources also suggest Riverbed will acquire all of the outstanding shares of OPNET common stock pursuant to an exchange offer, followed by a second step merger. In the exchange offer and the merger, OPNET stockholders will receive for each OPNET share they own.

"Riverbed and OPNET have natural synergies," said Marc Cohen, chairman and CEO, OPNET. "Riverbed's leadership in accelerating business technology combined with OPNET's industry-leading suite of APM products provides customers with a single solution for monitoring, troubleshooting and actually fixing the application and network performance problems challenging them today."

Officials with Riverbed were also quoted saying the addition of OPNET's broad-based family of APM products will enhance the company’s already strong position in the NPM market. Consequently, the resulting combination will be a product line with unparalleled visibility and insight into application and network performance.

Edited by Braden Becker

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