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'.)
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