Juniper announces plan to Acquire WLAN Vendor, Mist Systems

Juniper Networks announced plans to acquire Mist Systems for approximately $405M in cash.  We think this deal makes sense for Juniper, who can now sell a key technology – WLAN – into its customer base of large and medium enterprises.  Valuation of the deal probably fell a bit short of the expectations of some, but the vendor landscape has already seen significant consolidation between Ethernet Switch and Enterprise-class WLAN vendors, with now just a few potential buyers and sellers.

The companies just had a call to discuss the announcement and share the following messages:

  • Slightly dilutive to non gaap F19, accretive F20.
  • Verticals discussed on the call: h/c, retail, mfg and distribution segments
  • Key wins discussed:  Large healthcare organization, Verizon Mgd SP, Walt Disney Orlando, Dartmouth College
  • Business model will remain as current (60% hardware; 40% services at time of acquisition)
  • No revenue numbers share
  • $405M in cash; closes F2Q for JNPR
  • Avoided saying who Mist competes with, other than to say Mist sees “the usual suspects”
  • Mist should continue to grow because its channels will expand when Juniper acquires it
  • Juniper will expand the “AI for IT” technology from Mist across the Juniper portfolio of campus switch, security and SD-WAN
  • Will imminently begin 802.11ax pilots
  • Last time new technology was developed for WLAN industry was over a decade ago; Mist is microservices / container based; all new
  • Juniper has seen its campus switch business grow in recent times
  • Will share more numbers in the future