In October 2014, Danaher (DHR) announced an agreement with NetScout (NTCT). Danaher’s communication business will combine with NetScout. They will create services in network management and security solutions for carrier and enterprise customers. Danaher shareholders will receive 60% of the outstanding NetScout shares at $41.91. The deal is valued at $2.6 billion. NetScout’s CEO, Anil Singhal, stated that “This combination represents another important step, and 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.”
This acquisition is expected to combine complementary businesses that will benefit shareholders, customers, and associates. The firm will enjoy strong and stable long-term growth.
Deal closed at $2.3 billion
In July 2015, NetScout officially acquired Danaher’s communications business. It includes Tektronix Communications, Arbor Networks, and parts of Fluke Networks. It acquired the communications business for $2.3 billion. This expanded the firm’s portfolio in the network visibility and threat detection space. Anil Singhal also stated that “with a broader range of market-leading capabilities and technologies, as well as more extensive, global go-to-market and distribution resources, NetScout will be better positioned to capitalize on the many exciting opportunities we see to further expand our customer relationships around the world.”
The acquisition will enable NetScout to offer a broad range of innovative service assurance and cybersecurity solutions. It will provide service providers, enterprise, and public sector agencies with intelligence and analytics. This will help businesses maximize the benefits of powerful technology advances including IP convergence, virtualization, cloud computing, mobility, BYOD (bring your own device), and the evolving Internet. Analysts expect niche software and services players like NetScout, Pegasystems (PEGA), and CyberArk (CYBR) to have better growth opportunities due to greater market potential in the long term.
You can get diversified exposure to NetScout by investing in the First Trust ISE Cloud Computing Index Fund ETF (SKYY) and the iShares North American Tech-Software ETF (IGV). They hold 0.97% and 0.33% of the stock.