* To pay $1.35 per NET share
* Deal at 14.4 pct premium to NET's Monday close
* Deal values NET at $41.3 mln
* NET shares rise more than 12 pct
June 19 Voice and data communication equipment
maker Sonus Networks will buy smaller rival Network
Equipment Technologies (NET) for $41.3 million to tap
into the government segment.
Sonus will pay $1.35 per share for the networking equipment
provider, a premium of 14.4 percent to NET's Monday closing
NET, which got 50 percent of its total revenue from
government customers last year, counts the U.S. Department of
Defense, the U.S. Army, NASA and the U.K Ministry of Defense
among its customers.
"NET has a long history of selling to U.S. and foreign
governments which presents a new vertical market opportunity for
Sonus," Sonus Chief Executive Ray Dolan said on a conference
NET shares rose more than 12 percent at a six-month high of
$1.34 on Tuesday on the Nasdaq.
Nearly 3.8 million NET shares changed hands in the first 20
minutes of trade on Tuesday, compared to their ten-day average
trading volume of 23,464.
NET is also a key enabler of Microsoft's unified
communication solutions, which boosts Sonus's ability to address
the growing market, CEO Dolan said.
NET's customers also include Procter & Gamble Co
Accenture PLC and Northrop Grumman Corp.
Sonus expects the deal to add about $15 million to $20
million to its revenue in the second half of fiscal 2012.
If the deal adds $20 million to Sonus' revenue, it will have
no impact on or will slightly add to its adjusted earnings in
the second half, the company said.
However, if it adds only $15 million, adjusted earnings will
be hit by about 1 cent per share.
The all-cash deal is expected to close in the third quarter
Sonus shares were trading flat at $2.35 on Tuesday on the