Morningstar | Juniper Announces Mist Systems Acquisition to Bolster Portfolio Breadth; Maintaining FVE of $22
No-moat Juniper Networks announced the definitive agreement to acquire Mist Systems for $405 million in cash and the assumption of outstanding equity awards. Mist Systems is a provider of wireless access points and cloud-based wireless networks. The company offers artificial intelligence for wireless local access networks, and we believe this acquisition is a wise decision on Juniper's part. Before this announcement, Juniper has relied on partnerships with Aerohive and Mist to fulfill customers' needs for wireless networking systems. We believe that filling this portfolio gap helps provide customers a more holistic offering for networking solutions but will not significantly move Juniper's results in the near term and we are maintaining our $22 per share fair value estimate.Juniper’s management commented that fiscal 2019 non-GAAP EPS will decrease slightly, while fiscal 2020 non-GAAP EPS is expected to increase a bit due to the Mist acquisition. Based on Pitchbook data, Mist Systems was valued at $246 million in February 2018, after its third round of funding. We are interested to see how Juniper will integrate the artificial intelligence capabilities into its other networking equipment products as customers look for solutions to automatically resolve complexities driven by wireless systems becoming further complicated through data proliferation by edge computing, Internet of Things, and 5G devices. The acquisition is expected to close in Juniper's second fiscal quarter.
Juniper Networks designs, develops and sells products and services for networks. The company sells its products in three geographic regions: Americas; Europe, Middle East, and Africa; and Asia Pacific. The company sells its network products and service offerings across routing, switching, and security technologies. In addition, the company provides its customers services, including maintenance and support, services, and education and training programs. The company's products and services address network requirements for its customers within its vertical: Cloud, Service Provider, and Enterprise. The company's portfolio addresses domains in the network: core; edge; access and aggregation; data centers; and campus and branch.
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