June 20, 2012, 2:34 PM — Sonus Networks Tuesday announced it is buying Network Equipment Technologies, a nearly 30-year-old firm whose product focus over the years has spanned from T-1 multiplexers to SIP trunking and unified communications.
CONSOLIDATION: Top tech M&A deals of 2012
Fremont, Calif.-based NET announced a restructuring and layoffs in January, and Sonus was able to scoop up the 160-employee company for $41.3 million, or $1.35 a share. Sonus, which historically has focused on the service provider VoIP market with a portfolio of softswitches and other products, increasingly has targeted enterprises with a variety of session border controllers, SIP trunking products and call center offerings.
Sonus says NET's Unified Exchange product line complements its SBC 5100 and 5200 lines, as the company goes after enterprises looking to slash telecom bills via VoIP and trunk consolidation. Specifically, Sonus points to NET's branch and small office gear as extending its enterprise customer reach. Both companies' gear works with Microsoft's Lync unified communications technologies.
Sonus generates about $260 million in annual revenue, while NET pulls in about one-fifth as much.
The companies will outline their combined product roadmap at a later time.
News of the merger created some buzz on Twitter, including commentary from Evan Kirstel, director of strategic alliances at rival Acme Packet: "Sonus will have a tough time making NET profitable: 3 R&D locations, dying Federal business, low product margins ..."
Those in the extended Microsoft Lync unified communications business tweeted that they weren't sure what to think just yet. Wrote one, Matt Landis: "I think NET will keep their strength in #Lync. it's a market share play by Sonus really."
Read more about data center in Network World's Data Center section.