After nearly a year on the block, Trapeze Networks has been sold for about $150m, several sources have told us. An announcement is expected late next week. The buyer for the wireless LAN switch vendor isn’t immediately known – but it isn’t Juniper Networks. An OEM partner of Trapeze, Juniper also put money into Trapeze’s series D funding two years ago. One source indicated the two sides got very close to a deal last summer – at a price well north of the $150m Trapeze is expected to sell for now – but couldn’t agree on a final valuation.
We understand Trapeze looked to push the price higher, following the strong IPO of rival Aruba Networks. Aruba went public in late March 2007 at $11 per share and had doubled in price by July. At its peak, Aruba traded at a market capitalization of $1.9bn. However, Aruba has been stumbling recently, including reporting sales that were 20% lighter than Wall Street expected last quarter. The company now trades at just under a $500m market capitalization. Trapeze’s valuation also got caught in that downdraft. The rumored $150m price tag for Trapeze would value the company at roughly three times 2007 sales.
If indeed Trapeze is acquired, that would leave Meru Networks and Colubris Networks both looking for an exit. We understand that Meru, which is larger than Trapeze, is looking to hit the public markets when the IPO window opens again. In the past, we heard that Meru had talked with Foundry, although there was no indication of serious discussions. Meanwhile, Colubris would be a smaller acquisition, as it is running at about $30m in sales. Nortel Networks may be interested in Colubris. Whatever consolidation plays out in the WLAN switch market, most observers would agree that it’s overdue: It’s been more than three years since Cisco shook up the space with its $450m purchase of Airespace – a move that most expected to trigger a wave of deals.
Rumored WLAN matchmaking