NetScout Systems To Acquire Danaher's Communications Arm, Including Arbor Networks

NetScout Systems said this week it will acquire the communications arm of Danaher Corporation -- which includes Arbor Networks, a maker of appliances for preventing distributed denial-of-service (DDoS) attacks -- in a $2.6 billion deal.

The acquisition, expected to close in 2015, will give NetScout full ownership of Danaher's communications business, which, in addition to Arbor Networks, includes network testing equipment vendor Tektronix Communications, along with certain parts of network monitoring vendor Fluke Networks.

According to NetScout, which specializes in network performance and application monitoring, the deal will accelerate its push into the security market, while broadening its customer base in both the enterprise and service provider segments.

[Related: Arbor Networks Retools Partner Program In Wave Of High-Profile DoS Attacks]

Anil Singhal, co-founder, president and CEO of NetScout, said the move also will help the company carry out what it calls its 'NetScout 3.0 strategy,' which is aimed at bringing its packet-flow and performance-intelligence products into new and adjacent markets.

"This business combination will expand NetScout's global reach and help broaden our presence with customers in both the service provider and enterprise markets," Singhal said in a statement. "In addition, it will jump-start our planned entry into the Cyber Intelligence market, particularly within the advanced persistent threat area."

Westford, Mass.-based NetScout said the newly combined company is expected to have revenue exceeding $1.2 billion. The new group will continue to be led by Singhal, while James A. Lico, Danaher’s executive vice president, will join the NetScout Board of Directors.

Danaher's Communications business, which reported an annual revenue of roughly $836 million in 2013, has 2,000 employees worldwide, spanning its Tektronix Communications, Arbor Networks and Fluke Networks subsidiaries.

NetScout, meanwhile, has roughly 1,000 employees and reported a revenue of $396.6 million for its fiscal year 2014, which ended March 31 this year, compared to $112.3 million in 2013.

When asked how the deal may impact the NetScout channel, a NetScout spokesperson said the company is "working on providing further information by next week."

When the deal closes next year, Danaher’s shareholders will own approximately 59.5 percent of the combined company, and NetScout shareholders will own approximately 40.5 percent, the companies said.

PUBLISHED OCT. 17, 2014