Riverbed to Buy Opnet for $1 Billion

Riverbed Technology, Inc. and OPNET Technologies, Inc., provider of solutions for application and network performance management, announced that Riverbed has entered into a definitive agreement to acquire OPNET for $43 per share in cash and stock, representing an equity value of $1 billion and an enterprise value of $921 million.

The acquisition will enable Riverbed to extend its network performance management (NPM) business into the multi-billion dollar application performance management (APM) market. The combination of Cascade and OPNET will create a new force in the converged market for NPM and APM, with over $250 million in annualized revenue.

Networks and applications are required to work together to deliver the performance business users demand. The addition of OPNET’s broad-based family of APM products enhances Riverbed’s already strong position in the NPM market. The resulting combination is a product line with unparalleled visibility and insight into application and network performance. This acquisition enables Riverbed to provide customers with a unique integrated solution that not only monitors network and application performance, but also accelerates it.

"The addition of OPNET establishes Riverbed as the clear leader in the high-growth and converging application and network performance management markets," said Jerry Kennelly, chairman and CEO at Riverbed. "This acquisition also transforms Riverbed into a billion dollar revenue company."

"Riverbed and OPNET have natural synergies," said Marc Cohen, OPNET’s chairman and CEO. "Riverbed’s leadership in accelerating business technology combined with OPNET’s industry-leading suite of APM products provides customers with a single solution for monitoring, troubleshooting and actually fixing the application and network performance problems challenging them today."

OPNET will be combined with Riverbed’s Cascade business unit.

The transaction is expected to be accretive to Riverbed’s 2013 earnings per share on a non-GAAP basis. Leveraging the Riverbed brand, channels and infrastructure, Riverbed expects meaningful revenue and operating synergies in 2014.

Exchange Offer Details
Under the terms of the agreement between Riverbed and OPNET, Riverbed will acquire all of the outstanding shares of OPNET common stock pursuant to an exchange offer, followed by a second step merger. In the exchange offer and the merger, OPNET stockholders will receive for each OPNET share they own: (i) $36.55 in cash; and (ii) 0.2774 of a share of Riverbed common stock. The cash portion of the offer consideration will be financed through Riverbed’s existing cash on hand and new debt. The exchange offer is subject to customary closing conditions, including the tender into the exchange offer by OPNET stockholders of shares representing at least a majority of the outstanding shares of OPNET common stock on a fully diluted basis, receipt of financing and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as amended, and is expected to close before December 31, 2012.

Goldman, Sachs & Co. is serving as financial advisor to Riverbed; Weil, Gotshal & Manges LLP and Wilson Sonsini Goodrich & Rosati are serving as legal advisors to Riverbed. Lazard is serving as financial advisor to OPNET and Cooley LLP is serving as legal counsel to OPNET. Riverbed has received financing commitments from Morgan Stanley and Goldman, Sachs & Co.