HP Enterprise to Buy Specialized WAN Provider for $925M

Hewlett Packard Enterprise is acquiring software-defined WAN provider Silver Peak in a transaction valued at $925 million.
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Hewlett Packard Enterprise Co.  (HPE) - Get Report said Monday that it was acquiring Silver Peak, a software-defined wide area network company, in a transaction valued at $925 million. 

Silver Peak, Santa Clara, Calif., will be combined with HPE’s Aruba wireless networking subsidiary and will extend Aruba’s portfolio in the SD-WAN space.

"HPE was an early mover in identifying the opportunity at the edge and that trend is accelerating in a post-covid world," Antonio Neri, president and CEO of HPE, said in a statement.

"Silver Peak’s technology transforms legacy WAN architectures to self-driving WANs, which is a perfect fit with Aruba’s cloud-native artificial-intelligence-driven Edge Services Platform."

Silver Peak complements Aruba’s existing work-from-home and branch-office solutions. The Aruba portfolio is designed to securely connect any edge to any cloud, the company said.

Hewlett Packard Enterprises said Silver Peak’s "WAN delivers significant cost savings while maintaining application performance for rapid business recovery in a post covid-19 world."

Silver Peak has more than 1,500 production SD-WAN customers worldwide.

The transaction is expected to close in HPE’s fiscal 2020 fourth quarter and to be neutral to adjusted earnings per share by fiscal 2022, HPE said.

Legacy WAN architectures are no longer viable and incur relatively high costs, compelling enterprises to invest in SD-WAN technology, HPE said.

A recent report by International Data Corp. said the coronavirus pandemic has created demand for other network capabilities such as improved network-management and collaboration tools. 

The Portola Valley, Calif., market researcher 650 Group forecasts that the market for SD-WAN will more than double to $4.9 billion in 2024 from $2.3 billion in 2020.

At last check shares of Hewlett Packard Enterprise were up 0.7% to $9.33.