Another test-equipment company has chosen to go the acquisition route rather than grow its businesses organically. NetScout Systems recently plunked $2.6 billion down to acquire Danaher Corp's communications businesses.

Among the businesses acquired in the deal are security products provider Arbor Networks, service assurance and monitoring company Tektronix Communications, and network performance monitoring company Fluke Networks.

The data cabling tools business and carrier service provider tools business of Fluke Networks will be excluded from the transaction. Danaher's Communications business, excluding the previously mentioned Fluke Networks assets, generated approximately $836 million in revenue for their fiscal year ended December 2013, while NetScout generated approximately $397 million in revenue for their fiscal year ended March 2014.

"This combination represents another important step, and a major milestone, towards accelerating our ability to compete on a larger and more global scale in the broader IT management and Cyber Intelligence space, to fully implement our NetScout 3.0 strategy, and to maximise our potential in our total addressable market," said Anil Singhal, co-founder, president and CEO of NetScout.

This acquisition will significantly increase NetScout's product line and make it a much larger provider of network performance monitoring, service assurance, and security products. It will also enable the company to enter other markets. In fact, Fluke Networks alone will increase NetScout's share in network-performance monitoring equipment for enterprises to more than 20 per cent, which will further strengthen the company's leadership position.

Because Tektronix Communications acquired Newfield Wireless in December 2013, the acquisition will make NetScout the leader in VoLTE (voice-over LTE) monitoring with a market share exceeding 50 per cent of the global VoLTE probe-based network monitoring systems.

According to Frost & Sullivan research, Tektronix Communications is the leader in the markets for passive network monitoring and wireless protocol analysers. With this acquisition, NetScout will have over 55 per cent share in the passive network monitoring market and will extend its presence further to the service-provider community.

NetScout Systems jumped on the acquisition bandwagon quite a while ago, starting with Network General in 2007, then Psytechnics in 2011, Accanto Systems in 2012, and OnPath in 2013. With each acquisition, the company extended its product line and entered a new market, thus gaining greater market share and global footprint in addition to providing more value added products to customers.

NetScout has been very successful with these acquisitions, and I see a lot of synergy among various products in this merger. Will NetScout become the so called "one-stop stop" for all network performance intelligence needs of communications service providers, equipment manufactures, and enterprises?

By: DocMemory
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