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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
http://www.lightreading.com
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whatajokeshareoptionsare 12/4/2012 | 10:18:11 PM
re: Unisphere Close to $200-300M Deal? just wanted to correct the spelling
whatajokeshareoptionsare 12/4/2012 | 10:18:11 PM
re: Unisphere Close to $200-300M Deal? your reply begs the question is it possible to manipulate perception in these boards , I believe the rumour that Juniper was buying Unisphere first appeared here and was denied by a Unisphere spokeperson
William F. Letcher 12/4/2012 | 10:18:10 PM
re: Unisphere Close to $200-300M Deal? the Unisphere denial is more strongly-worded than I would have thought if there was in fact a deal. on their track record for reporting rumors, in past instances Light Reading has scooped a real story, and other times they have come up empty. so time will tell...

JudasPriest 12/4/2012 | 10:18:10 PM
re: Unisphere Close to $200-300M Deal? Scott must have a great deal of faith in his source to go out on a limb like this. I'm sure he didn't come upon this information after bumping into a booth babe at the bar at Jock & Jill's.

We can speculate as to whether this rumor is based in fact or fiction, but I'm willing to bet that Scott's source is somewhat credible. LR may be known for its irreverence, but I've not known them to go this far out without having some level of sincere confidence in the source.

That said a $200-300M deal this close to an announcement that Unisphere is being bought for $750M raises a great many questions.

Did Juniper have negotiations with Verizon underway, but needed Unisphere to close a long-term deal?

Why would Siemens spin out a company for that kind of money if they knew there was a deal imminent? Was Siemens the roadblock, and the only way for them to cash was to get the money via a Juniper sale?

Time will tell. A flat-out denial means nothing, however, except that the parties involved are covering their exposed buttocks since they can't officially say anything without risking the SEC's unwanted attention.

whatajokeshareoptionsare 12/4/2012 | 10:18:10 PM
re: Unisphere Close to $200-300M Deal? What I hear is that the deal is real, but Juniper was not an incentive but a problem after the fact.
gea 12/4/2012 | 10:18:08 PM
re: Unisphere Close to $200-300M Deal? "A flat-out denial means nothing, however, except that the parties involved are covering their exposed buttocks since they can't officially say anything without risking the SEC's unwanted attention."

I would guess that the real reason for denial here is that people don't start buying up Siemens stock in order to get some leverage into the buyout. If they did, the stock price would go up and make the deal much less attractive.

mbledug 12/4/2012 | 10:18:06 PM
re: Unisphere Close to $200-300M Deal? Whose edge routers has Verizon been using up to
now? Cisco?

Mbledug
Route495 12/4/2012 | 10:18:06 PM
re: Unisphere Close to $200-300M Deal? Verizon uses lot of LU equipement.
According to this report Unisphere has
a good shot of getting the deal.
What happened to other startups like WaveSmith in the edge space?
AAL5 12/4/2012 | 10:18:00 PM
re: Unisphere Close to $200-300M Deal? BobbyMax (aka Harvey Mudd aka Verbal-Diarrhea-Man),

Hey you actually said something that might be true, regarding Unisphere and market share. Unfortunately you messed up your potential home-run by spouting you usual 'I hate Cisco and the world line'.

I hate to be put in the position of defending the "Big C", but how exactly are Juniper's products better than Cisco's?

- Is it the fact that the M160 has a screwed architecture that means it has out of order packet problems? I know of a couple of big carriers that are going to remove M160s because of this problem.

- Perhaps it is the fact that when you turn any sort of feature on the M160 (ACLs etc.), your performance goes to hell? OC-48/192 line rate with loads of edge features, not a chance in hell.

- Maybe its the well known head of line blocking problems that exist in the M160?

I'm not saying there aren't issues with IOS, but Juniper has a more fundimental problem, their hardware architectures have been designed for time to market first, over an architecture that is extendable and supports edge like features on a core router at line rate. I'm not even going down the route of the fork-lift truck issue, that has been done to death.

Regarding you insightful comments regarding California, as mentioned before you should resolve your hate and anger problem with your therapist. You did take my advise the last time and actually get one didn't you?

AAL5

BobbyMax 12/4/2012 | 10:18:00 PM
re: Unisphere Close to $200-300M Deal? The acquisition of Unisphere is indeed a very good deal for Juniper. Unisphere has been very successful in gaining market share from Cisco. On the contrary, Juniper has lost market share to Cisco. Also some of the Juniper's routers have not been successful in the market place. It should be mentioned that Juniper's products are much better in quality than Cisco.s products. Cisco resisted fair evaluation of its products. Many of the claims made by Cisco regading its product performance.

The marriage between Juniper and Unisphere would be successful if Juniper does not impose the California culture (which unfortunately is very similar to the cultures of many third world countries)on Unisphere. They should also not interfere with the marketing efforts of Unisphere.
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