NETWORK equipment maker Riverbed Technology last night announced the purchase of privately-owned UK software group Zeus for $110m (£68m) in cash plus up to $30m in performance-linked payments.
Zeus, based in Cambridge, makes programmes to manage traffic on cloud computing systems. The deal is expected to be break-even for Riverbed earnings in 2011 and earnings-accretive in 2012, the firm said in a statement.
“According to industry analysts, the virtual ADC market is expected to grow about four times faster than the traditional ADC market over the next four years,” said Jerry Kennelly, president and CEO at Riverbed. “Zeus is well positioned within this market as customers look for ADC solutions for public and private clouds that truly integrate into their application stack.”
Riverbed also announced weaker than expected second-quarter revenue as it saw softness in Europe, sending its shares down 22 per cent in after-market trade.
The firm reported a second-quarter net profit of $11.3m, or seven cents a share, compared with $6.6m, or four cents a share, in the year ago quarter. Adjusted earnings were 21 cents a share, in line with market estimates. Revenue rose 35 per cent to $170.3m, but missed analysts’ expectations of $172.9m.