Unisphere Close to $200-300M Deal?

ATLANTA -- Unisphere Networks Inc. is close to landing an edge router contract valued in the hundreds of millions of dollars with Verizon Communications Inc. (NYSE: VZ), according to sources close to both companies.

Such a contract would provide yet another reason why router maker Juniper Networks Inc. (Nasdaq: JNPR) got hungry to buy Unisphere -- and was willing to part with $375 million in cash to do so.

But Unisphere adamantly denies the story. "There is no deal to announce," says a Unisphere spokesperson. "Your information is wrong."

Talk of such a deal was circulating on the show floor here at Supercomm 2002. One source, citing contacts at the large East Coast RBOC, says it's a serious deal and very close to happening.

”The contract could be big enough to pay for Juniper’s purchase of Unisphere,” says the source, who requested anonymity. A separate source at Unisphere confirmed that a hefty RBOC (regional Bell operating company) contract would be announced shortly but wouldn’t name the customer.

If the deal is real, it could earn back some of the cash that Juniper will expend if its planned purchase of Unisphere goes through. It would be especially helpful, of course, if such a deal amounted to hundreds of millions of dollars. Juniper announced late last month a deal to buy Unisphere in a deal worth about $740 million, with $375 million of that coming in the form of cash (see Juniper Nabs Unisphere for $740M). The deal is expected to close in the third quarter of this year.

A big contract with Verizon would also give Juniper another beachhead in an RBOC, the most coveted of carrier customers.

Verizon had not returned calls at press time.

— R. Scott Raynovich, US Editor, Light Reading
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Lightmare 12/4/2012 | 10:18:17 PM
re: Unisphere Close to $200-300M Deal? No, really, this is a big deal!

So if its this big of a deal, why the hell did unisphere sell out?

1. This could give them more revenue than jnpr this year
2. it could send them into ipo land
3. if they closed the deal with verizon and then went to sell the company, they could fetch a much higher price tag

So what the heck gives?

Sounds like jnpr fell into a heap of gold and looks like the employee's of uni get the short end of the shtick - no?
bluemtn 12/4/2012 | 10:18:17 PM
re: Unisphere Close to $200-300M Deal? Siemens would have sold the UniSphere for more if a deal were so close. The RBOCs take 6-12 months of lab and field trials before they buy. Even then a deployment would start out slower than a 200/300 million dollar contract.

To boot, if JNPR were about to get a deal like this and it was leaking on Briefing.com and Light Reading. You would probably see it in the stock price already.

Go figure
zoinks! 12/4/2012 | 10:18:17 PM
re: Unisphere Close to $200-300M Deal? Or is this an even bigger deal for the industry as a whole (assuming that this isn't a 200 year deal at 1M per year)?

Does this signify a potential end of the drought?

diag_eng 12/4/2012 | 10:18:15 PM
re: Unisphere Close to $200-300M Deal? It is probably a multi-year deal. In any event it is nice to see an RBOC spending money again.

If the xLEC's who've gone out of business have accomplished anything (since the '96 Telecom Act), it was getting the RBOC's to spend money.

whatajokeshareoptionsare 12/4/2012 | 10:18:15 PM
re: Unisphere Close to $200-300M Deal? The real question is how willing is Verizon to honour a deal that was made with Unisphere, now that Unisphere no longer exists, what kind of relationship does Juniper have with Verizon
steve 12/4/2012 | 10:18:13 PM
re: Unisphere Close to $200-300M Deal? Juniper must have know the deal was coming and the value of the contract was baked into the price paid for Unisphere. Also, Juniper must have gotten comfortable that Verizon would honor the contract with a new owner, otherwise there could be a clawback of the sales price. (if Juniper had a decent advisor that is how it should have been structured). As for the Unisphere employees, would rather be holding Juniper options than Siemens or Unisphere options.
optically_speaking 12/4/2012 | 10:18:13 PM
re: Unisphere Close to $200-300M Deal? perhaps not only was Juniper comfortable that verizon would honor the contract, the merger might have been a prerequisite of signing the contract...Verizon certainly would be more comfortable with a contract this size given the larger service and support footprint of Juniper -
raid 12/4/2012 | 10:18:12 PM
re: Unisphere Close to $200-300M Deal? Perhaps, we need to treat this as just another rumor.

But Unisphere adamantly denies the story. "There is no deal to announce," said a Unisphere spokesperson. "Your information is wrong."

Normally, the company would just say we don't respond to rumors. Here, they are clearly stating that "your information is wrong". My read is that the rumor has no merit. Hopefully, I am absolutely and completely wrong!
whatajokeshareoptionsare 12/4/2012 | 10:18:12 PM
re: Unisphere Close to $200-300M Deal? Siemens was the service and support footprint before the buyout, you don't seriously consider Juniper a safe pair of hands like Siemens or Nortel as percieved by the voice proletariate(sp?)
Route495 12/4/2012 | 10:18:11 PM
re: Unisphere Close to $200-300M Deal? Verizon likes to choose the most promising big boy and the most promising startup and let them duel it out in the final showdown. Unisphere was most probably the best prospect among the startups but no carrier/rboc would touch a startup unless they have a big boy support (which could explain why Unisphere sold out to Juniper). Juniper got a foot in the door as it was most probably not getting in thru the other category.
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