WESTFORD, Mass. (AP) — Sonus Networks Inc., which makes Internet hardware and software, said Tuesday that it is buying communications equipment maker Network Equipment Technologies Inc. for about $41.3 million in cash.
Freemont, Calif.-based Network Equipment makes internet communications equipment for both government and private customers. Sonus said the acquisition will expand its line-up of real-time communications products.
Under the terms of the agreement, Sonus will pay $1.35 per share for the company. The offer represents a 14 percent premium over the company's Monday closing stock price.
Network Equipment shares jumped 15 cents, or 13 percent, to $1.33 per share in morning trading. They have traded in a range of 71 cents to $2.81 over the past year. Sonus Networks shares slipped a penny to $2.33 per share.
Based on Network Equipment's about 30.6 million outstanding shares, the deal is worth about $41.3 million. The companies valued the deal at about $42 million, excluding acquisition-related costs.
The deal has been approved by the boards of both companies, but remains subject to Network Equipment shareholder approval and other customary closing conditions. It's expected to close in the third quarter.
Sonus, based in Westford, Mass., said it expects the acquisition to boost its revenue by $15 million to $20 million in the second half of fiscal 2012, depending on when the deal closes.
Sonus said if it reaps $15 million in second-half revenue from the deal, it expects the acquisition to reduce its second-half adjusted profit by about 1 cent per share. But if the revenue totals $20 million, Sonus said it expects the deal to either have no impact on, or slightly boost, its adjusted earnings