* Creates a Premier Provider of Converged Network and Application
Performance Management Solutions
* Significantly Increases NetScout’s Scale and Global Presence
* Accelerates Entry into Cyber Intelligence Market
WESTFORD, Mass.--(BUSINESS WIRE)--Oct. 13, 2014--
Systems, Inc. (NASDAQ:NTCT), a market leading provider of
performance analytics and operational intelligence solutions, today
announced that it has entered into a definitive agreement to acquire the
Communications business of Danaher Corporation (NYSE:DHR), comprising
Tektronix Communications, Arbor Networks, and certain parts of Fluke
Networks. Under the terms of the transaction, Danaher shareholders will
receive approximately 62.5 million shares of NetScout common stock,
which values the transaction at $2.6 billion based on NetScout’s closing
price of $41.91 on October 10, 2014. The transaction will increase
NetScout’s scale and broaden its customer base in both the service
provider and enterprise markets, while accelerating NetScout’s entry
into the Cyber Intelligence market. On a non-GAAP basis, the combined
company is expected to have revenue exceeding $1.2 billion and the
transaction is expected be accretive in the first year of combined
operation. The transaction is expected to close in the first half of
NetScout’s fiscal year 2016.
“This combination represents another important step, and a major
milestone, towards accelerating our ability to compete on a larger and
more global scale in the broader IT management and Cyber Intelligence
space, to fully implement our NetScout 3.0 strategy, and to maximize our
potential in our total addressable market,” stated Anil Singhal,
co-founder, president and CEO of NetScout.
“NetScout’s high-performance monitoring technology combined with our
premier troubleshooting, cyber security and engineering solutions will
create the most comprehensive suite of best-in-class solutions in the
industry today,” said James A. Lico, Danaher’s Executive Vice President.
“The combined company will offer even greater breadth and depth across
both carrier and enterprise networks, expanding opportunities for
innovation and growth while improving our customers’ overall experience
with comprehensive software-based solutions.”
Upon completion of the transaction, Mr. Lico will join NetScout’s Board
of Directors, increasing the total number of directors to eight.
NetScout will continue to be led by Mr. Singhal as president, CEO and
chairman, along with the rest of his executive team.
Mr. Singhal concluded, “This business combination will expand NetScout’s
global reach and help broaden our presence with customers in both the
service provider and enterprise markets. In addition, it will jump-start
our planned entry into the Cyber Intelligence market, particularly
within the advanced persistent threat area. I am extremely excited about
our potential to continue creating even more value for our customers,
shareholders and employees. I also look forward to having Jim Lico, an
experienced executive with tremendous insight into Danaher’s
Communications business, join our Board.”
This transaction will bring together two long-respected leaders in the
network and applications performance management and security sectors to
create a premier provider of mission-critical solutions that can help
customers drive compelling ROI on their IT investments, and mitigate the
considerable business and operational risks associated with network and
application downtime, service degradation, compliance lapses and
Danaher’s Communications business generated revenue (unaudited) of
approximately $836 million for the year ended December 31, 2013.
Danaher’s Communications business, which has over 2,000 employees
Tektronix Communications, based in Plano, Texas, which provides a
comprehensive set of assurance, intelligence and test solutions and
services support for a range of architectures and applications such as
LTE, HSPA, 3G, IMS, mobile broadband, VoIP, video and triple play.
Also included are VSS Monitoring and Newfield Wireless.
Arbor Networks, based in Burlington, Massachusetts, which provides
solutions that help secure the world’s largest enterprise and service
provider networks from DDoS attacks and advanced threats.
Fluke Networks, based in Everett, Washington, which delivers network
monitoring solutions that speed the deployment and improve the
performance of networks and applications. The data cabling tools
business and carrier service provider (CSP) tools business within
Fluke Networks are not included this transaction.
NetScout, with over 1,000 employees, has a proven track record of
successful acquisition integration, highlighted by the retention of key
talent, strong collaboration across various technical areas, numerous
technical accolades and notable success in driving customer adoption of
new and enhanced products that resulted from these acquisitions.
The combination of NetScout and Danaher’s Communications business will
be structured as a Reverse Morris Trust (RMT) transaction under which
Danaher shareholders will receive an aggregate 62.5 million NetScout
shares, valued at approximately $2.6 billion based on NetScout’s closing
stock price of $41.91 on Friday, October 10, 2014. Using the RMT
structure, the transaction is expected to be tax free to both Danaher
and NetScout, as well as their respective shareholders. Additional
details related to the RMT structure and related information for Danaher
shareholders are available in a news release that Danaher issued today.
Upon the completion of the merger, Danaher’s shareholders will own
approximately 59.5% of the combined company and NetScout shareholders
will own approximately 40.5% on a fully diluted basis.
The transaction’s closing is subject to approval by NetScout
shareholders, regulatory approvals and other customary closing
conditions, as well as the receipt by Danaher of a ruling by the U.S.
Internal Revenue Service and opinions of counsel regarding certain tax
matters. The Boards of Directors of both companies have unanimously
approved the transaction. Under the terms of the agreement, Mr. Singhal,
who currently owns more than 5% of NetScout’s shares, will vote his
shares in favor of the combination.
Advisors to NetScout
RBC Capital Markets is acting as the exclusive financial advisor to
NetScout Systems. Cooley LLP advised NetScout in connection with the
transaction, with additional legal counsel provided by Baker & McKenzie
and Wilson Sonsini.
Conference Call and Webcast Instructions:
NetScout will hold a conference call on Monday, October 13, 2014 at 9:00
a.m. ET, which will be webcast live through NetScout’s website at http://ir.netscout.com/phoenix.zhtml?c=92658&p=irol-irhome.
Alternatively, people can listen to the call by dialing (866) 701-8242
for U.S./Canada and (763) 416-6912 for international callers and using
conference ID: 19499747. A replay of the call will be available after
11:30 a.m. ET on October 13, 2014 for approximately one week. The number
for the replay is (855) 859-2056 for U.S./Canada and (404) 537-3406 for
international callers. The conference ID is: 19499747.
As previously announced last week, NetScout will report its
second-quarter fiscal year 2015 financial results for the period ended
September 30, 2014 on Thursday, October 16, 2014 at approximately 7:30
a.m. ET and host a corresponding conference call and live webcast on the
same day at 8:30 a.m. ET.
About NetScout Systems, Inc.
NetScout Systems, Inc. (NASDAQ:NTCT) is the market leader in application
and network performance management solutions that enable enterprise and
service provider organizations to assure the quality of the user
experience for business and mobile services. Used by 92 percent of
Fortune 100 organizations and more than 165 service providers worldwide,
NetScout’s technology helps these organizations proactively manage
service delivery and identify emerging performance problems, helping to
quickly resolve issues that cause business disruptions or negatively
impact users of information technology. For more information about
NetScout, visit www.netscout.com.
Additional Information and Where You Can Find It
NetScout will file a Registration Statement on Form S-4 containing a
proxy statement/prospectus of NetScout and other documents concerning
the proposed acquisition with the Securities and Exchange Commission
(the “SEC”). Investors are urged to read the proxy statement/prospectus
when it becomes available and other relevant documents filed with the
SEC because they will contain important information. Security holders
may obtain a free copy of the proxy statement/prospectus (when it is
available) and other documents filed by NetScout with the SEC at the
SEC’s website at www.sec.gov.
The proxy statement/prospectus and other documents may also be obtained
for free by contacting Andrew Kramer, Vice President of Investor
Relations, by telephone at 978-614-4000, by email at email@example.com,
or by mail at Investor Relations, NetScout Systems, Inc., 310 Littleton
Road, Westford, MA 01886.
This communication is not a solicitation of a proxy from any security
holder of NetScout. However, NetScout, Danaher and certain of their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from NetScout’s stockholders
in connection with the proposed transaction. Information about
NetScout’s directors and executive officers and their beneficial
ownership of NetScout’s common stock may be found in its definitive
proxy statement relating to its 2014 Annual Meeting of Shareholders
filed with the SEC on July 24, 2014. This document can be obtained free
of charge from the SEC website at www.sec.gov.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934
and other federal securities laws. Investors are cautioned that
statements in this press release, which are not strictly historical
statements, including without limitation, the statements that the
acquisition creates a premier provider of converged network and
application performance management solutions; significantly increases
NetScout’s scale and global reach, accelerates NetScout’s entry into the
cyber intelligence market, and broaden its customer base in both the
service provider and enterprise markets; that the combined company will
generate revenue in excess of $1.2 billion on a non-GAAP basis, that the
transaction will be accretive to non-GAAP earnings in the first year of
combined operation, and that the transaction will close during the first
half of 2015; that the acquisition will accelerate NetScout’s ability to
compete on a larger and more global scale in the broader IT management
and cyber intelligence space, that it will accelerate NetScout’s ability
to fully implement its NetScout 3.0 strategy and to maximize its
potential in its total addressable market, that the acquisition will
create the most comprehensive suite of best-in-class solutions in the
industry today, that the combined company will offer even greater
breadth and depth across both carrier and enterprise networks, expanding
opportunities for innovation and growth while improving its customers’
overall experience with comprehensive software-based solutions, that Mr.
James A. Lico will join the NetScout Board of Directors upon completion
of the transaction, that it will create even more value for NetScout’s
customers, shareholders and employees; other references to potential
benefits associated with the proposed acquisition; and the timing and
milestones related to completing the merger constitute forward-looking
statements which involve risks and uncertainties. Actual results could
differ materially from the forward-looking statements due to known and
unknown risk, uncertainties, assumptions and other factors. Such factors
include the failure to obtain, delays in obtaining or adverse conditions
related to obtaining shareholder or regulatory approvals; the
anticipated tax treatment of the transaction and related transactions;
risks relating to any unforeseen changes to or the effects on
liabilities, future capital expenditures, revenue, expenses, synergies,
indebtedness, financial condition, losses and future prospects; failure
to consummate or delay in consummating the transaction for other
reasons; our ability to retain key executives and employees; slowdowns
or downturns in economic conditions generally and in the market for
advanced network and service assurance solutions specifically, the
Company’s relationships with strategic partners, dependence upon
broad-based acceptance of the Company’s network performance management
solutions, the presence of competitors with greater financial resources
than ours and their strategic response to our products; and the ability
of NetScout to successfully integrate the merged assets and the
associated technology and achieve operational efficiencies.
For a more detailed description of the risk factors associated with the
Company, please refer to the Company’s Annual Report on Form 10-K for
the fiscal year ended March 31, 2014 on file with the Securities and
Exchange Commission. NetScout assumes no obligation to update any
forward-looking information contained in this press release or with
respect to the announcements described herein.
©2014 NetScout Systems, Inc. All rights reserved. NetScout and the
NetScout logo and nGenius are registered trademarks of NetScout
Source: NetScout Systems, Inc.
NetScout Systems, Inc.
Andrew Kramer, 978-614-4279
President of Investor Relations