The router maker says it has agreed to buy NetScreen Technologies, a network security provider, as it gears up for battle with heavyweight Cisco Systems.
Under the terms of the deal, Juniper will exchange about 1.4 shares of its own common stock for each outstanding share of NetScreen. The companies said they expect the deal to close during the second quarter of 2004 if the merger successfully garners shareholder and regulatory approvals. At Juniper's stock price of $29.47 a share at market close on Friday, the deal would be worth about $4 billion.
Juniper executives said the merger would create a single entity focused on providing networking products and services, with a specific emphasis on security and performance. Through NetScreen, the company gains access to a range of security software and hardware technology, specifically products aimed at protecting virtual private networks, creating corporate firewalls and managing network traffic. Juniper's primary rival is networking giant Cisco Systems.
"Both Juniper and NetScreen have proven their ability to execute separately, and together, we will accelerate our ability to serve an expanded market with complementary best-in-class solutions," Scott Kriens, chief executive of Juniper, said in a statement. "Our collective customers have told us security, reliability and performance are mission-critical to their network users, and together, we will deliver a compelling response to their needs."
Juniper has been on a roll of late, posting fourth-quarter 2003 profits that far surpassed Wall Street expectations and seeing its stock price swell to nearly $30 per share. The company, which specializes in Internet Protocol routers, has benefited from partnerships with a number of other telecommunications gear manufacturers, including Ericsson, Lucent Technologies and Siemens.
NetScreen investors relished the news, sending shares soaring 35 percent Monday morning, up $9.45 to $35.85. Juniper's stock, meanwhile, sagged $3.32, or 11 percent, to $26.15.