Meru Networks, Inc.NASDAQ
Jul. 8, 2015, 1:41 PM
- Fortinet's (FTNT - unchanged) $44M ($1.63/share) acquisition of enterprise Wi-Fi hardware/software vendor Meru Networks (MERU - unchanged) is officially on the books. The deal was first announced on May 27.
- Meru will operate as a Fortinet subsidiary. Echoing prior remarks, Fortinet declares Meru will allow it to "deliver new solutions and services to help enterprises of all sizes deploy, manage, and secure wired and wireless networks in a mobile era."
- Shares are two days removed from getting hit by a Cowen downgrade to Underperform. Oppenheimer once more defended Fortinet yesterday. "Our bullish stance is driven by continued strength from high-end appliances, strength across all geographies and verticals notably within the Telco vertical, and Fortinet's Advanced Persistent Threat (APT) solution continues to see solid demand as APT remains prevalent."
May 27, 2015, 9:37 AM
- Fortinet (FTNT -1.4%) is acquiring Meru Networks (MERU +16%), a provider of enterprise Wi-Fi access points, controllers, and management software, for $44M in cash, or $1.63/share. The price represents a 17% premium to Meru's Tuesday close, and is equal to just 0.54x Meru's 2015 sales consensus of $81.3M.
- Fortinet, which already offers Wi-Fi access points and integrated Wi-Fi/security appliances, declares the deal "expands its opportunity to uniquely address the $5B global enterprise Wi-Fi market with integrated and intelligent secure wireless solutions." It also notes Meru's product line includes cloud/virtual Wi-Fi controllers (eliminates the need for dedicated hardware), and SDN-capable management and provisioning software.
- The deal is expected to close in Q3. Meru has been struggling to deal with competition from larger rivals such as Cisco and HP/Aruba Networks. The company announced a strategic review in January.
- Separately, Fortinet has launched FortiGuard Mobile, a subscription service that aims to protect phones/tablets from cyber threats, and which integrates with Fortinet's mainstay ForiGate unified threat management (UTM) appliances. Palo Alto Networks recently partnered with VMware to offer its own mobile security solutions.