(Reuters) - Network gear maker Riverbed Technology Inc RVBD.O will buy Opnet Technologies Inc (OPNT.O), which makes software to manage traffic on networks, for about $1 billion to gain an edge over rivals who have all been hurt by weak tech spending.
But demand for products that boost data speeds over wide-area networks, where Riverbed is a market leader, have held up relatively well.
“This acquisition also transforms Riverbed into a billion dollar revenue company,” said Chief Executive Jerry Kennelly.
Riverbed will combine Opnet with its Cascade business unit, which makes products that monitor network performance.
The deal is expected to add to Riverbed’s 2013 adjusted profit and the company said it expects “meaningful revenue” in 2014.
The $43 per share cash-and-stock offer represents a 34 percent premium, based on the stocks’ Friday close.
Opnet shareholders will receive $36.55 in cash and 0.2774 of Riverbed’s common stock for each Opnet share they hold.
Riverbed forecast strong results for the fourth quarter earlier this month and analysts expect full-year revenue of $834.8 million.
The company has received financing commitments from Morgan Stanley and Goldman, Sachs & Co. Goldman is also serving as the financial advisor to Riverbed, while Lazard is the financial advisor for Opnet.
Reporting by Sayantani Ghosh in Bangalore; Editing by Joyjeet Das