Cyber security provider Fortinet (FTNT) ponied up $44 million for Meru (MERU), a $90 million Sunnyvale, CA Wi-Fi networking management specialist, in a move to broaden its portfolio and gains an avenue into the $5 billion global enterprise wireless market.
Under the terms of the agreement, Fortinet will pay $1.63 per Meru share in cash. The deal is expected to close in Q3 of this year. Fortinet said the transaction will have no material impact for the full year 2015 but once the deal is complete it will include Meru in its guidance going forward. Until the deal finalizes, the two companies will continue to operate separately, officials said.
Fortinet said the deal fleshes out its strategy to hinge security and wireless to offer value to customers through an integrated, secure network fabric that protects transmitted information and simultaneously manages the network and devices.
The deal offers channel partners a broader portfolio of solutions to sell to enterprise customers, officials said.
Meru, which claims some 14,000 customers, specializes in wireless connectivity management, controllers to manage traffic, a secure system to integrate wireless and wired networks and appliances for data center or cloud deployments.
To underscore the deal, Fortinet separately announced a new BYOD mobile security subscription service called FortiGuard Mobile Security to protect mobile devices and applications in the enterprise.
“The acquisition of Meru Networks maps to our overall security vision of combining strong network security with ubiquitous connectivity,” said Ken Xie, Fortinet founder, chairman and chief executive.
“We expect this to accelerate our innovation through the delivery of new solutions and services to help enterprises of all sizes deploy, manage and secure wired and wireless networks in a mobile era,” he said. “We believe the extension of our market-leading end-to-end security platform will increase our growth opportunities and benefit our customers and partners globally.”
Meru’s research and engineering team is expected to come along with the deal. The company employs some 300 people.
Fortinet likely viewed Meru as a value acquisition. The company, which went public in 2010, has seen its revenue decline in its most recent quarters, with 2015 sales expected to dip 11 percent from last year. The company’s stock has fallen 39 percent to $1.61 in the last three months and its market capitalization stands at $39.1 million.
Dr. Bami Bastani, Meru president and chief executive, said "Meru's technology differentiation, and its position as the only ONF-certified SDN wireless solution, along with Fortinet's core, edge and access security solutions, will provide a broader solutions portfolio for our sales teams and channel partners.”