Riverbed joins chase for Radware

Riverbed Technology Inc. has entered the race against Hewlett Packard Co., which is still in talks to acquire Radware.

By SHIRI HABIB-VALDHORN / GLOBES
Money 311 (photo credit: Bloomberg)
Money 311
(photo credit: Bloomberg)
Radware Ltd. has made no comment about being on the shelf for months, but it clearly is attracting interest among other communications equipment makers.
Riverbed Technology Inc. has entered the race against Hewlett Packard Co., which is still in talks to acquire Radware. The bidding by the two companies is about $47 per share, reflecting a company value for Radware of $900 million to $1 billion, a 45 percent premium on its current market cap.
Radware’s share rose 19.1% at the opening on Nasdaq to $39.03, giving a market cap of $745m.
Radware is sticking with its “no comment” policy of recent months with regard to Riverbed’s entry into the picture. At the conference call following the publication of Radware’s third-quarter financial report, executives declined to comment on the negotiations for the acquisition of the company, merely saying, “The company is keeping its eyes and ears open for opportunities to increase value for shareholders.”
Radware knows Riverbed well. The two companies complement each other in terms of technological capabilities, they collaborate in the distribution of products, and sometimes they submit joint bids in tenders for communications infrastructures.
Riverbed, founded in 2003, is considered an industry star. It has a market cap of $5.1b. and posted a net profit of $13m. on $147m. revenue for the third quarter.
The proposed merger is not just between two companies but also between two fields of business. Radware makes products to improve the performance of applications by routing Internet traffic load (application delivery controller, or ADC), and Riverbed offers enterprise network optimization solutions between remote branches (WAN optimization controller, or WOC).