Did Juniper Pay 'Peanuts' for BTI?

Juniper Networks got a bargain when it scooped up packet optical vendor BTI Systems last week, paying $50 million -- or less.

That $50 million-or-less price tag was passed to us from three sources, with a fourth saying the company sold for "peanuts."

The reason for the low price? BTI's packet optical technology is unremarkable, according to one source. "How much do you pay for a dead horse?" says the source.

BTI has raised $130 million since its founding in 2000 and about $60 million in growth funding since 2011.

Juniper announced the acquisition last week, saying it wants to leverage BTI for the DCI market. Content, cloud and communications service providers need networking technology designed specifically to transport large volumes of traffic between data centers securely and efficiently, Juniper says. (See Juniper Flies Into DCI With BTI Acquisition.)

Juniper doesn't want to build a big optical business, but rather to serve the DCI and metro markets, CEO Rami Rahim said on the company's earnings call Wednesday, the day after announcing the acquisition. (See Juniper: Packet-Optical Convergence Driving BTI Acquisition.)

A Juniper spokesperson declined to comment. The terms "are not considered to be material to our financials," the spokesperson said in an email to Light Reading. "However, we look forward to sharing more information in Q2 of this year," the spokesperson said.

Related posts:

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, and Stephen Saunders, Founder and CEO, Light Reading

ethertype 2/3/2016 | 2:40:18 PM
Re: good juan So I guess we can conclude that Ray's speculation was off base and the "dead horse" comment was actually a credible, neutral assessment.

(Weird business, having readers mediate between LR staff on the message boards...)
Mitch Wagner 2/3/2016 | 1:56:20 PM
Re: good juan If that's true, why is your reporter featuring a quote from someone with a "stake in the game"?  That would be really poor reporting, wouldn't it?

Yes it would be, if that is what I had done. 
Mitch Wagner 2/3/2016 | 1:55:35 PM
Re: good juan A dead horse doesn't have to mean the technology is rotten. It cold just mean there's not much market value to it when standing alone. 

Could also be a reference to the company rather than the technology.

If the technology is competitive there must be some reason the company went at bargain basement rates. 
ethertype 2/2/2016 | 2:41:33 PM
Re: good juan If that's true, why is your reporter featuring a quote from someone with a "stake in the game"?  That would be really poor reporting, wouldn't it?
Steve Saunders 2/2/2016 | 12:46:23 PM
Re: good juan JNPR wouldn't buy anything at any price (low or high ) which didn't have actual value. 
[email protected] 2/2/2016 | 12:45:21 PM
Re: good juan Anyone refering to BTI as a 'dead horse' would appear to have a stake in the game... let's see what happens with BTI as part of the Juniper machine + whatever Juniper adds next (and I can't imagine it will stop at this one M&A move)
Steve Saunders 2/2/2016 | 12:30:33 PM
Re: good juan feels like part of the trend that started with Overture... solid companies being bought for less than investment capital. Why? Market forces... the consolidation is really starting to bite. 
[email protected] 2/2/2016 | 12:25:12 PM
Re: good juan There's no doubt BTI seized the data center interconnect (DCI) opportunity with both hands and made a success of it. It also developed very reliable technology, according to people I spoke with over the years, and landed a neat Google deal some years back.

If the price was as low as $50 million I'll be very interested to see the associated financial data becuase, based on previous projections and statements, that wold put it below annual revenues.

There's more to come on this one.
Steve Saunders 2/2/2016 | 11:21:11 AM
good juan Good story Mitch, 

Though... dead horse seems a scoot harsh. I think they were considered a leadrer in DCI, which is a pretty important category of tech 

Sign In