Juniper Networks Inc. said Monday it has agreed to acquire network-security software maker NetScreen Technologies Inc. for about $3.5 billion in stock.
The companies said the acquisition is expected to close in the second quarter.
The deal comes as Juniper, of Sunnyvale, Calif., has been buoyed by a recovery in the telecommunications sector. The company, which makes routers that direct computer traffic across the Internet, last month reported fourth-quarter net income of $14.7 million, or 4 cents a share, up from the previous year’s $8.5 million, or 2 cents a share, as revenue rose 33 percent to $207 million. It marked the first time since September 2001 that quarterly revenue topped $200 million.
In a prepared statement Monday, Juniper Chairman and Chief Executive Scott Kriens said: “Our collective customers have told us security, reliability and performance are mission critical to their network users, and together we will deliver a compelling response to their needs.”
In the deal, each share of NetScreen, which is also based in Sunnyvale, will be exchanged for 1.404 shares of Juniper. At Friday’s closing prices, the offer represented a 56 percent premium to Netscreen’s share price.
Shares of NetScreen were at $37.29 in early trading Monday, up $10.89, or 41 percent, on heavy volume on the Nasdaq Stock Market. The day’s strongest level of $38, at that point, was a 52-week high surpassing the prior high of $29.97 set Jan. 20.
While NetScreen shares climbed, those of Juniper were at $27.12, down $2.35, or 8 percent, on heavy volume on the Nasdaq.
NetScreen has about 92 million shares outstanding.