Spirent sharpens cloud strategy by purchasing Mu Dynamics for $40M

Spirent Communications (LSE: SPT.L) is adding some flavor to its cloud security service testing strategy by reaching an agreement to acquire privately-held Mu Dynamics for $40 million in cash.

Sunnyvale, Calif.-based Mu is best known as a provider of automated performance and security testing software that it says can replicate applications to perform the security and performance testing for service providers, vendors, and government agencies.

Shares of Spirent fell in early trading on the London exchange from its opening price of $168.30 and by 10:20 ET had rebounded to $166.90, about 30 percent below opening.

To address the security risks that come with any cloud deployment, Mu brings Spirent two key solutions it can use to target new cloud-based application performance management opportunities: TestCloud and its recently launched cloud-based Blitz.io service.

With TestCloud, any service provider or government agency can access a cloud-based store of test content that enables them to keep abreast of the growing suite of applications, devices and attacks that end-users bring to a network. Likewise, Blitz.io enables enterprise application and website developers to test user's QoS of Software as a Service (SaaS) deployments.

Of course, the other thing that Mu brings to Spirent is a strong list of service providers including Sprint (NYSE: S), Telus (Toronto: T.TO), and Verizon (NYSE: VZ), government agencies including the U.S. Air Force, and vendors like Alcatel-Lucent (NYSE: ALU), Cisco (Nasdaq: CSCO), HP (NYSE: HPQ), and Juniper (NYSE: JNPR).

After it completes the acquisition later this month--possibly April 23--Spirent said that it will consolidate $9 to $10 million in revenue in 2012. Looking forward, it expects to generate revenues in the range of $17 to $19 million operating at Spirent's average return on sales, enhancing its total company earnings.

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