Juniper Networks on Monday unveiled its intention to purchase security-systems vendor Netscreen Technologies in a deal worth almost $4 billion.
Juniper, which primarily sells high-end routers to telecom service providers and large enterprise networking customers, said it wants to be able to offer a wider range of technologies to its customers, a target list that might now include more enterprise-networking concerns than before. The deal puts Juniper more closely into competition with Cisco Systems, which already offers a wide range of networking products for businesses.
"Our collective customers have told us security, reliability and performance are mission critical to their network users, and together we will deliver a compelling response to their needs," Juniper CEO Scott Kriens said in a statement.
Investors reacted strongly to the deal Monday, sending Juniper's stock price down $3.29, or 11%, to $26.18 while sending Netscreen's price up $9.54, or 36%, to $35.94, perhaps a reaction to the high premium Juniper placed on Netscreen's stock. According to the announcement, Juniper proposes to exchange 1.404 shares of its own common stock for each outstanding share of NetScreen's common stock. The deal is expected to close in the second quarter, pending regulatory and shareholder approvals.
Netscreen, known for its VPN and firewall hardware products, recently reported revenue of $81 million for its most-recent financial quarter.