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Procera Networks, Inc. Message Board

  • petercohen33 petercohen33 Feb 4, 2013 8:33 AM Flag

    Oracle to buy network gear maker Acme Packet for $1.9 billion

    Reuters) - Oracle Corp said it agreed to buy network gear maker Acme Packet Inc for about $1.9 billion.

    The $29.25 per share offer is at a 22 percent premium to Acme Packet's Friday close on the Nasdaq.

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    • I don't know all of the specifics on APKT financials, but in their last quarter they did $65m in revenue. This was actually down from $70m the previous year. And looks like around $370m in cash and equivalents. So at $1.9b, they are being priced at cash + 6x sales.

      Given the same metrics, PKT should be valued at $600m, which is about 70% higher than current price.

      This is a crude estimate, but it gets the idea across that PKT is severely undervalued.

    • 8:21am 155shrs @ $17.15 & 8:33am 100 shrs @ $ 18.39 . I am aware of the similarity in both Compamnies ticker symbols APKT / PKT such a this poorly written article .

      Top Spec and Tech for 2013: Acme Packet

      By Sean Udall January 4, 2013 01:27 PM

      With Stifel Nicolaus upgrading Acme Packet (APKT) to a buy from hold today - a position they've held for nearly six years - I wanted to readdress one of my top picks for 2013.

      Yes you all are reading that right, Acme Packet (APKT) is a Top Tech and not just a Top Spec. The reason here is simple. I believe APKT is going to be a notable earnings growth winner and has two product cycles instead of just one to benefit from as I see the migration to 4G/LTE being as strong a catalyst as my renewed spending thesis on networking/high capacity bandwidth upgrades. In fact, we could see APKT produce two runs this year. The first half of the year could/should be driven by core networking strength, which re-ignites the core products in Acme's portfolio. The back half of the year should be driven by APKT growing orders and gaining share in core 4G investment/upgrades.

      Even though different in industry, the catalysts here are similar to Facebook (FB), which also made both lists. Negativity got too extreme last year, valuation is not as rich as many think, and notable revenue and earnings acceleration are in the offing.

      From a valuation standpoint, many point to a high P/E and that sort of short sighted view isn't going to work on this name. First, its not nearly as expensive as many claim as the company is only trading at 4X net cash, and roughly 4.5X revenues. That multiple on rev's is similar to Riverbed (RVBD) or RADWARE (RDWR). It's also lower than F5 Networks (FFIV), Citrix (CTXS) and much lower than names like Allot Communications (ALLT) or Procera Networks (PKT). And I'd argue that the EPS acceleration (and rev. growth) for APKT in the next 1-2 years should be higher than most, if not all of those names. Further, APKT has produced $1.00 plus in EPS before and I would be surprised if they don't materially exceed that level again. Thus, anything in the $1.20-1.50 area for EPS puts the PE is a very modest range for this name.

      Bottom line, while this name is highly volatile, they have returned to earnings stability and maintained strong cash flow, while not having produced a notable upside quarter in over a year. When that upside quarter occurs, I expect the stock to retake the low/mid $30's. Then, if the back half produces the 4G spending in developed countries that I expect, we could see further gains from those mid $30's levels.

    • Is there much of a difference between the technology at Acme and PKT?

      • 1 Reply to innsbrooklad
      • PKT has a unique niche product they are not competing directly with APKT but probably have strong overlap of customer base.

        Business Summary

        Acme Packet, Inc. provides session delivery network solutions that enable the delivery of voice, video, data, and unified communications services and applications across Internet protocol (IP) networks. Its Net-Net product family consists of session border controllers that control session delivery across defined border points; session managers, which manage user access and interface application servers; multiservice security gateways for securing session delivery of data and voice services over untrusted Internet and wireless fidelity access networks; and diameter signaling controllers. The company’s Net-Net products also comprise session-aware load balancers that scales border control for SBC, MSG, and DSC deployments; session routing proxies that route sessions to/from access and interconnect borders; application session controllers for enabling server applications to initiate and control sessions; and session recorders, a complete software-based IP session recording solution, which performs session recording for the session delivery network. In addition, it offers purpose-built hardware platforms, including Net-Net 3820, 4500, 9200, and 14000; and Net-Net Central, a management platform that delivers configuration and fault, and performance and security management for its session delivery networks. Further, the company offers products that provide core session delivery network functions inside data centers as software products; and pre-installation and post-installation, and training services. Acme Packet, Inc. markets and sells its products and support services through distribution partners and sales force. It serves local exchange and long distance providers, international service providers, cable operators, Internet telephony service providers, voice application service providers, wireless service providers, enterprises, contact centers, universities, and government agencies worldwide. Acme Packet, Inc. is headquartered in Bedford, Massachusetts.

    • If APKT is worth $1.9b, then PKT is certainly worth a lot more than $330m.

 
PKT
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