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GIMO 19.43, Articles. Goldman Sachs Sees Wave of M&A Among Cable, Telecom Suppliers

BY Antoine Gara | 06/23/14 - 11:24 AM EDT

Updated from 10:35 a.m ET to include stock prices, added commentary.

NEW YORK (TheStreet) -- The consolidation of the telecom sector may be nearly complete as investors await a long-speculated merger of Sprint (S_) and T-Mobile (TMUS_), but analysts at Goldman Sachs believe there could be a brewing wave of deal-making among companies that supply equipment to the telecom and cable industries.

Regulatory Risks in Sprint and T-Mobile Deal Outweigh Stretched Finances

A team of Goldman communications technology analysts led by Simona Jankowski said on Monday they have raised their ranking that Adtran (ADTN_), Calix (CALX_), Ciena (CIEN_), Infinera (INFN_), Juniper Networks (JNPR_) and Silver Springs Networks (SSNI_) could each be the target of consolidation, as telecom and cable equipment suppliers seek scale and revenue growth to meet a recovering economy.

Those firms now join BlackBerry (BBRY_), BroadSoft (BSFT_), Gigamon (GIMO_), Infoblox and Ruckus Wireless (RKUS_) as the most-likely M&A targets in the communications technology space, according to Goldman's rankings.

Goldman updated what it calls the "M&A rankings" report across the communications technology sector because it believes recent consolidation, for instance Comcast's (CMCSA_) proposed takeover of Time Warner Cable (TWC_), AT&T's (T_) offer for DirecTV (DTV_) and Sprint's possible merger with T-Mobile, could pressure vendors to also seek added scale. Meanwhile, management teams are refocusing on top-line growth either through organic investment or M&A amid a recovering economy.

In its report, Goldman also cited a favorable investor reaction to M&A, the tax-efficient use of overseas cash and more attractive overall market valuations as factors that could drive M&A in the telecom equipment space.

"[T]here has been a wave of service provider (carriers, multi-service operators (MSOs), Internet service providers (ISPs)) consolidation and there has been media speculation that this consolidation will continue. We believe the resulting rationalization of vendors at these consolidating service providers as well as a smaller absolute number of service provider customers to sell into could cause a corresponding consolidation in service provider vendors," Goldman concluded.

Silver Spring Network shares have shed over 30% year-to-date, while Adtran and Calix have both fallen over 15% in 2014. Ciena has fallen nearly 8% year-to-date, while Infinera has fallen nearly 5%. Only Juniper Networks has risen in 2014, posting an over 8% rise.

Goldman believes the outperformance of large-cap communication tech firms relative to smaller and mid-size competitors could increase the possibility of consolidation, as M&A becomes less costly and possibly more accretive to earnings.


-- Written by Antoine Gara in New York.

http://www.thestreet.com/story/12752932/1/goldman-expects-wave-of-telco-tech-ma.html


Gigamon’s new hire pursues growth in service provider markets across Asia Pacific
June 23, 2014 – Gigamon® (NYSE: GIMO), a leader in traffic visibility solutions with the innovative Unified Visibility Fabric™, today announced that Robert D’Amico has been appointed as Senior Director Sales – Service Provider, for Asia Pacific and Japan. He will be based in Sydney.

D’Amico’s role in leading Gigamon’s service provider business will focus on supporting existing communications service provider customers, growing sales, increasing market share and establishing a service provider partner infrastructure throughout the region.

“The prospect of building a service provider team is exciting in this high growth Asia Pacific region,” said D’Amico. “We are looking to assist our service provider customers that are experiencing visibility challenges associated with Big Data, NFV (Network Function Virtualisation) and VoLTE (Voice over Long Term Evolution). Visibility is a critical criteria of any future-looking, high performance architecture due to the increased network complexity and the volume of data.”

Gigamon’s Visibility Fabric allows customers to reduce network monitoring complexity and cost, and enables them to de-risk the rollout of projects like VoLTE and network virtualisation, while managing the explosive growth of data on their networks. Gigamon’s patented Flow Mapping® and innovative GigaSMART® solution assists operators in achieving these goals.

D’Amico sees Gigamon’s Visibility Fabric playing a key role in enhancing a wide range of solutions. For instance, Gigamon believes software-defined networking (SDN) is a powerful technology that holds promise for operational simplification, but it can leave customers with limited visibility of data in virtualised networks. This can lead to challenges in ensuring that the network is performing as desired without the proper monitoring infrastructure.

Gigamon’s Visibility Fabric architecture enables best-of-breed monitoring solutions for network performance, customer experience management, security, troubleshooting, application analysis, forensics and compliance partners to better visualise and optimise their environment.

D’Amico has more than 20 years in the high tech and telecommunications industry and joins Gigamon from his most recent role as the Service Provider, Cloud and Media Sales Manager for Australia and New Zealand at F5 Networks. Previously he worked at Cisco, McAfee, Symbol Technologies, and began his career at Telstra.

About the Visibility Fabric architecture

At Gigamon we realised that delivering the visibility essential to manage, analyse and secure the complex system that is the IT infrastructure requires a new approach. With millions of traffic flows across thousands of endpoints, visibility needs to be pervasive, intelligent and dynamic. Using our patented, unique technology, we created an innovative new approach for delivering this visibility called the Visibility Fabric architecture. This new approach is intelligent and versatile in its ability to enable visibility into the network.

About Gigamon

Gigamon provides an intelligent Visibility Fabric™ architecture for enterprises, data centres and service providers around the globe. Our technology empowers infrastructure architects, managers and operators with pervasive and dynamic intelligent visibility of traffic across both physical and virtual environments without affecting the performance or stability of the production network. Through patented technologies and centralised management, the Gigamon GigaVUE portfolio of high availability and high density products intelligently delivers the appropriate network traffic to management, analysis, compliance and security tools. With over eight years’ experience designing and building traffic visibility products in the US, Gigamon solutions are deployed globally across vertical markets including over half of the Fortune 100 and many government and federal agencies. www.gigamon.com

For more information

David Frost,

http://www.whatech.com/members-news/networking/22446-gigamon-s-new-hire-pursues-growth-in-service-provider-markets-across-asia-pacific


Long GIMO for a swing trade.