Juniper Buys Kagoor

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Rich Tehrani
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Juniper Buys Kagoor

You may have heard about the Juniper and Kagoor acquisition (article) already but I have the inside scoop on the whys and hows and the future of Juniper now that Kagoor is part of the company. Juniper touts its mission as assuring and securing all traffic over an IP network and its customers, the large service providers are increasingly seeing the need for voice to be among the more important applications they need on their networks.

This led naturally to Juniper needing a session border controller product in its arsenal to allow them to supply the needs of their customers more effectively. In addition, Juniper’s VP of Marketing, Christine Heckart tells me that there are over 100 shared customers between the companies and Juniper wanted access to the company’s talent pool and development base in Israel.

I brought up the rumors I had heard of Juniper looking at other companies in the space such as
Jasomi and Christine shared with me that Juniper generally does an analysis of all companies in a space before acquiring one. In the end they want to purchase best in class technology and Kagoor had the best technology hands down. Moreover, the ability of Kagoor’s products to scale as well as the superior functionality of the company’s products were deciding factors in the acquisition process.

The sale price was $67.5 million in cash which on under $5 million in revenue is a multiple of more than 13.5 times 2004 earnings!

I asked if Juniper thought they would be setting a trend by making this acquisition and they said they think they may as they are often trendsetters. Ultimately these decisions depend on the needs of other companies.

When asked how important VoIP is in Juniper’s overall strategy Christine told me it is on the top 3 items on the list of their customers. VoIP is strategic she told me. Finally, the Kagoor name will become Juniper and Kagoor product name changes (if any) haven’t been decided upon yet.

Another important point is that Juniper feels its customers would rather buy SBC technology from an established player such as themselves as opposed to a start up that may not be as stable.

This acquisition at a great multiple is a shot in the arm to the VoIP market. It will generate more energy and effort among other SBC companies and will also show investors that VoIP players indeed have good exit strategies. Personally I am waiting to see if Vonage announces they are being purchased soon. A successful sale by Vonage would be like a shot of adrenaline in arm of a VoIP market already running on 12 cylinders with the turbo at full boost.

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