Deal-making in a desert

Thu, 12 Jun 2008 19:21:03 +0000

Exactly a year ago, SonicWall handed over $25m in cash for Aventail. The deal looked like a ‘last-gasp’ transaction in a number of ways, not the least of which was that Aventail’s purchase price was less than one-quarter of the venture funding the company had raised over the years. Beyond the money-in/money-out gulf at Aventail, we would note that in the year that has passed, not a single significant SSL VPN deal has been reached.

Since the big-name consolidation in this market began in mid-2003, most of the large security acquirers have gone shopping here. SSL VPN deal flow hit its high point early on, with NetScreen shelling out $265m, mostly in stock, for Neoteris. (A half-year later, Juniper Networks threw $4bn in stock at NetScreen, in a deal that Juniper has yet to recognize much of a return on.) Other tech giants quickly inked deals of their own, including Cisco, Citrix and Microsoft.

In contrast, the handful of companies that have acquired SSL VPN technology since mid-2007 have been tiny outfits, with a number of consulting shops doing the buying. That hardly suggests top-dollar acquisitions. The SSL VPN vendors that missed out when the big buyers came through the market may need to scale back their exit expectations. We would drop PortWise and Array Networks, among others, into that bucket.

Significant SSL VPN deals

Acquirer	Target	Date	Price
F5 Networks	uRoam	July 2003	$25m
NetScreen	Neoteris	Oct. 2003	$265m
Cisco	Twingo	March 2004	$5m
Citrix	Net6	Nov. 2004	$50m
Microsoft	Whale Communications	May 2006	$75m*
SonicWall	Aventail	June 2007	$25m

*estimated, Source: The 451 M&A KnowledgeBase

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Aventail – Inorganic Growth

Deal-making in a desert