A nice number of the DPI and Policy Management companies are Canadian. M Partners, an independent full service investment bank HQ in Toronto, estimates that some of them are on the M&A radar of biggest telecom equipment vendors. See Reuters report - "DEALTALK-Tech giants set sights on Canadian mobile software cos" - here.
""Bridgewater, Sandvine and Redknee may be attractive acquisition candidates for network equipment vendors interested in upgrading their capabilities and for enterprise software vendors looking to extend their reach into the mobile broadband vertical," analyst Ron Shuttleworth of M Partners said"
"Bridgewater, which manages mobile data and congestion, could be on the radar of Alcatel-Lucent (ALUA.PA), IBM (IBM.N) and Ericsson (ERICb.ST), while Sandvine could be targeted by Nokia Siemens [NSN.UL], Ericsson and Cisco (CSCO.O). Asian companies like Huawei Technologies Co [HWT.UL] could also be among the potential bidders .. Analysts expect Sandvine and Redknee to get offers that are more than double their current share price .. Redknee, which has mobile billing and charging solutions, could be wooed by Amdocs, Microsoft (MSFT.O) and SAP AG (SAPG.DE)."
"For the network gearmakers, it could take four to five years to build what Bridgewater and Sandvine are doing," M Partners' Shuttleworth said.
Related post: "Cisco Needs a Policy Server - Is it going to be Bridgewater, Openet or Someone Else? - here
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Do you really think Sandvine is for sale? I don't think so. I don't think a buyer would be willing to pay what it would cost to get this company. Caputo's been bought and shutdown by Cisco once before - not going to go without a fight the next time. Thoughts?
ReplyDeleteI can’t say much about management’s emotions, but as far as the cost, Sandvine seems to be attractive. With market cap of $215M, cash and short-term securities totaling to $92M (May 31st) the enterprise value for the DPI leader is reasonable to TEMs. Compare this to what Tekelec paid for Camiant ($135M in cash and they had ¼ of Sandvine’s revenue in a smaller market) or to some degree the $2.9B paid for Starent, and you get a bargain which should be attractive to ALU, NSN or Juniper.
ReplyDeleteHaving said that – Allot’s enterprise value is half of Sandvine’s ..
Nevertheless, the DPI market has to grow above the current “P2P control” application and make sure it has a solid value proposition to the large carriers, associated with ARPU increase.