Procera enhances its Enterprise DPI play with Vineyard Networks acquisition

Procera Networks, a policy enforcement vendor, on Monday announced it is going to acquire Vineyard Networks, a move that will enable it to extend its Intelligent Policy Enforcement business deeper into the Enterprise Deep Packet Inspection (DPI) market.

Under the terms of the agreement, Procera is purchasing Vineyard for CAD 28.0 million (USD 28.3 million), a figure that includes CAD 15.4 million (USD 15.6 million) Procera common stock and CAD 12.6 million (USD 12.7 million) in cash. In addition, Procera will assume approximately CAD 500,000 (USD 507,033) of Vineyard's outstanding debt.

When Procera completes the acquisition it expects to add about $4 to $5 million to Procera's 2013 revenue, with gross margin in excess of 90 percent.

A key element of the acquisition is that Procera will immediately be able to use Vineyard to become a bigger supplier to enterprise equipment vendors.

"Vineyard enables Procera to expand our total addressable market through their OEM business to include enterprise network equipment vendors, adding the entire enterprise space along with additional opportunities in the service provider OEM market," said James Brear, Procera's president and CEO, in a release announcing the acquisition. "The addition of Vineyard, which has 34 employees mostly in engineering and product development, establishes Procera as the clear leader in the high-growth DPI market."

One of the many trends driving the need for increased enterprise DPI is the Bring Your Own Device (BYOD) trend, in which employees are using their own tablets and smartphones to access company data. This means enterprises and their service providers need greater visibility into what's traveling over their networks to ensure non-critical applications won't interfere with premium priority traffic.

Procera's timing for the Vineyard deal could not be any better as the total addressable market (TAM) for the Enterprise OEM DPI market is expected to be over $300 million in 2013.

For more:
- see the release

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