Mobile security

Mavenir's Stoke Buy: Cheap at Twice the Price?

Mavenir appears to be getting LTE security gateway vendor Stoke for a knock-down bargain price ahead of the traditional Black Friday holiday sales in the US.

Mavenir Systems Inc. revealed in an SEC filing that it is paying $2.9 million in cash for Stoke Inc. and assuming $1.9 million of the company's debt. Stoke had pulled in around $92 million in venture funding since 2005.

After it closed its final $17 million series E round in 2011, the company had even considered an IPO a "possibility." (See Stoke IPO Is a 'Possibility'.)

Stoke, after all, had high-profile operator customers such as NTT DoCoMo Inc. (NYSE: DCM) and SoftBank Mobile Corp. using its LTE security gateway. (See Mavenir Buys Stoke for Security, Small Cell.)

Learn more about strategies for keeping mobile data secure at our upcoming Mobile Networking Security Strategies event in New York on December 3.

Financial analyst Richard Valera at Needham & Co. suggested in a research note that the acquisition won't be a "major needle mover" for Mavenir, but views the buy as favorable. [Ed. note: No kidding!]

"It sounds like Stoke was running at a small loss, but MVNR expects it will be neutral to MVNR earnings in 4Q14," Valera writes.

Mavenir's ambition for the Stoke hardware platform is to make it a virtualized, hardware-independent security system in the future.

The buyout is expected to close on November 21.

— Dan Jones, Mobile Editor, Light Reading

stawdema 11/24/2014 | 8:52:00 PM
Re: Cheap ? Yes :) They will be more successful than the likes of Stoke. But they are no Starent :)
kq4ym 11/19/2014 | 2:39:39 PM
Re: Cheap ? Unless someone knows something that everyone else doesn't, it's probably a safe bet that the price is reasonable even though it might seem "cheap." Takng to consideration the lack of great earnings, it's just another deal and hope for a big turn in revenue and profit.
DanJones 11/19/2014 | 12:13:11 PM
Re: Cheap ? Affirmed Networks, no?
Gabriel Brown 11/19/2014 | 11:08:57 AM
Re: Cheap ? "the other remaining MA based packet core startup" Qui ca?
stawdema 11/18/2014 | 9:37:13 PM
Cheap ? It may be pennies on the invested dollar but there is probably a reason for that. Neither Stoke nor other similar companies like Wichorus achieved what they wanted to which was to be the next Starent. Let's see what the other remaining MA based packet core startup achieves
DanJones 11/18/2014 | 6:16:33 PM
Amazing Anyone else kind of amazed in the gulf between the funding raised and the selling price?

I wonder if they ever broke even.
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