Riverbed to acquire Mazu Networks

BENGALURU, INDIA: Riverbed Technology would acquire Mazu Networks to help organizations manage, secure and optimize the availability and performance of global applications.

Mazu, based in Cambridge, Massachusetts, will become a business unit of Riverbed. In connection with the acquisition of all of the outstanding securities of Mazu, Riverbed will pay approximately $25 million in cash at closing, with an additional possible payment to be paid subsequent to closing based on future sales performance.

“The market for WAN optimization is fast becoming more mainstream, and increasingly our enterprise and service provider customers are demanding more visibility, reporting and analytics capabilities from us, as they seek to deploy more robust infrastructure for managing their global applications. This requirement is driven by the enterprise’s need to reduce costs via consolidation, improve end-user productivity, and leverage technology to streamline business processes,” said Jerry M Kennelly, President and CEO, Riverbed.

“Our customers require an integrated system to monitor and deliver a managed WAN optimization service. By providing an integrated solution based on Mazu’s offerings, we are able to tailor the reporting to demonstrate the value of optimization, which in turn supports the value of the provider’s service to its customers,” continued Kennelly.

The Mazu product line supports Riverbed’s position by delivering speed in performance analysis, providing scale to Riverbed’s customers’ ability to monitor the optimization and performance of their key applications and allowing Riverbed to deliver simplicity in the analysis and reporting of that information across a customer’s entire environment with customizable dashboards and reports.

Key financial and other terms of the transaction:

$25 million cash payment at closing

Payment of up to $22 million in cash based on achievement of certain bookings targets in a defined 12-month period following the closing. The maximum payment would require they achieve $35 million in bookings.

The closing of the acquisition is subject to customary closing conditions, including approval of Mazu’s stockholders.

The parties intend to consummate the acquisition as soon as practicable and currently anticipate that the closing will occur before the end of the first quarter of 2009

The impact to Riverbed’s non-GAAP earnings is expected to be approximately breakeven in 2009 and accretive in 2010.