Riverbed Agrees to Buy Opnet for $1 Billion

Riverbed Technology Inc. (RVBD) has agreed to buy Opnet Technologies Inc. (OPNT) for about $1 billion in cash and stock as the network-appliance maker looks to extend its network performance management business into the multibillion-dollar application performance management market.

Riverbed will pay Opnet's shareholders a per-share price of $43, a 34% premium over the company's Friday closing price.

"The addition of Opnet establishes Riverbed as the clear leader in the high-growth and converging application and network performance management markets," Riverbed Chief Executive Jerry Kennelly said. "This acquisition also transforms Riverbed into a billion dollar revenue company."

Riverbed noted that the combination of its Cascade business unit and Opnet will create a new force in the converged market for network and application performance management, with over $250 million in annualized revenue.

The deal, which is expected to close Dec. 31, is expected to add to adjusted earnings in 2013. The company said it expects meaningful revenue and operating synergies in 2014.

Opnet stockholders will receive $36.55 in cash and about 0.28 of a share of Riverbed common stock for every Opnet share they own. The cash portion of the offer consideration will be financed through Riverbed's existing cash on hand and new debt.

Separately Monday, Opnet reported fiscal second-quarter results that missed expectations. Earnings fell 19% as revenue costs and operating expenses climbed. And earlier this month, Riverbed reported double-digit profit growth with strong sales in Europe and the Americas, moving past missteps that hit the bottom line at the beginning of the year.

Write to Saabira Chaudhuri at [e-mail]

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