Juniper to Spur AI-Based Solutions With 128 Technology Buyout

Juniper Networks, Inc. JNPR has inked an agreement to acquire smart wide area networking startup — 128 Technology, Inc. — for $450 million. Through the deal, the network products and services provider aims to expand its footprint in the AI-driven enterprise solutions market.

Founded in 2014, Burlington, MA-based 128 Technology has introduced an innovative session-based routing solution that enables experience-based networking. The deal will augment Juniper’s AI-driven enterprise network portfolio by combining 128 Technology’s Session Smart networking with the former’s campus and branch solutions powered by Mist AI.

128 Technology’s session-smart networking allows enterprise customers and service providers to create a seamless user experience-centric fabric for WAN connectivity. The solution delivers industry-leading performance and scale at a lower operational cost than a traditional WAN router and SD-WAN solutions.

The acquiree will be integrated with Juniper’s AI-driven Enterprise business unit, which includes wired and wireless access and SD-WAN. The combined portfolio will give customers a unified platform for optimized user experiences from client to cloud.

Juniper’s portfolio minimizes IT costs with excellent client-level insight and self-driving network automation. It reduces network overhead while delivering superior user experiences for Voice over Internet Protocol, 5G and collaboration apps.

The acquisition, subject to regulatory approvals, is expected to close in the fourth quarter of 2020. In 2021, the transaction is expected to be slightly accretive to revenues and gross margin, but dilutive to non-GAAP earnings per share (EPS). It is estimated to be accretive to non-GAAP EPS in 2022.

At September-end, the Sunnyvale, CA-based company announced its intent to acquire Netrounds, a network testing and monitoring expert, to reinforce its lineup of WAN products, providing greater levels of automated assurance to complex networks.

Juniper is witnessing solid momentum in Mist Systems and strength in its services organization. It has made changes to the go-to-market structure to better align sales strategies with each of its customer verticals. The company plans to launch several products over the next few quarters, which are expected to strengthen its position across service provider, cloud and enterprise markets.

Juniper’s shares have lost 2.4% in the past six months against 48.7% growth of the industry. The company has a long-term (three to five years) earnings growth expectation of 8% compared with the industry’s 15.2%.

Juniper carries a Zacks Rank #3 (Hold), at present.

Some better-ranked stocks in the broader industry are Corning Incorporated GLW, Ooma, Inc. OOMA and Viasat, Inc. VSAT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

Ooma delivered a trailing four-quarter positive earnings surprise of 238.9%, on average.

Viasat delivered a trailing four-quarter positive earnings surprise of 361.3%, on average.

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