Enterasys (Quote), one of four firms that spun out of network
equipment pioneer Cabletron Systems in 2000, is being bought by a group of
investment firms for $386 million.
The maker of switches, routers, local area networks and security systems
announced the sale to a consortium led by Gores Group and Tennebaum Capital
this morning. The price, which works out to $13.92 per share, represents a
32 percent bump over the stock's Friday closing price.
"Both [Gores and Tennebaum] have a successful track record of working with
companies to grow in the technology space," Mark Aslet, Enterasys CEO, said
on a conference call.
In addition to giving the company the tools to continue growing on its own,
Aslet said the new owners have the capital needed to help Enterasys grow
through acquisition.
For the last several years, networking giants with deeper pockets than
Enterasys have been buying smaller companies to add complementary products
and technologies.
For example, Juniper (Quote) today announced that it will pay $122 million for security specialist Funk Software.
Cisco has also been a buyer, picking up
firms that specialize in Voice over IP and other emerging areas.
The company's current senior managers will continue to lead Enterasys, and
its corporate headquarters will remain in Andover, Mass., Aslet said.
The buyout has been unanimously recommended by Enterasys directors. The deal
requires approval from shareholders and regulators and is expected to close
during the first quarter, after which Enterasys will become a privately
held company.
Gores executives said Enterasys has the qualities it looks for in a purchase, including a strong technology, employees, management team and customer base.
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