Juniper Buys Unisphere

Networking vendor Juniper Networks Inc. has agreed to purchase rival Unisphere Networks Inc. for $740 million in cash and stock, the companies announced today.

Juniper, of Sunnyvale, Calif., and Unisphere, of Westford, Mass., both target the service provider and telecom carrier space with their Internet routers. Juniper officials say that the two companies product lines will be complementary and allow Juniper to expand into the consumer access market.

The move also will help Juniper as it aims at rival Cisco Systems Inc. In the latest router market numbers from DellOro Group Inc. for the first quarter of this year, Cisco held a commanding 83.6 percent market share for routers in the 1 Gbps-to-9 Gbps range where the companies mainly compete. Unisphere followed with 10 percent and Juniper was in third with 3.8 percent, according to DellOro, in Redwood City, Calif. Both Unisphere and Juniper had lost share from a quarter earlier.

The transaction is expected to be completed in the third quarter but still requires approval by the companies boards of directors and by regulators. The transaction includes $375 million in cash and 36.5 million shares of Juniper stock, which closed Friday at $9.85 a share.

As part of the deal, Juniper is entering into partnership agreements with Unisphere parent company, Siemens AG, of Munich, Germany and its Information and Communications Networks group. Through a reseller agreement, Juniper will gain access to the Siemens sales channel in 190 countries.

Siemens also will own about 10 percent on Junipers outstanding shares.

“Our acquisition of Unisphere Networks highlights the Juniper Networks focus on supplying IP expertise to the leading service providers, carriers and PTTs,” said Juniper CEO, President and Chairman Scott Kriens in a statement. “These customer will now be able to leverage the global reach of Siemens to utilize both Juniper Networks and Unisphere Networks proven IP experience.”

The combination will result in Juniper offering a broad portfolio of core, edge, cable and mobile IP routing and broadband access products, he said.

Kriens will remain in his same position in the combined company. James Dolce, president and CEO of Unisphere, will become executive vice president of field operations and oversee all sales, service and marketing