bloggingbuyouts

Shares of Citrix Systems Inc. (NASDAQ: CTXS) are up more than 7% today on rumors that the virtualization software vendor could be a takeover target. Citrix has been considered more of a buyer than an acquisition candidate, having last year closed a $500 million acquisition of XenSource Inc.

But now IBM Corp. (NYSE: IBM) and Cisco Systems Inc. (NASDAQ: CSCO) are sniffing around the company, according to the rumor du jour. Avian Securities analyst Jeff Gaggin says in a research note today that Citrix has developed a virtualization management offering that has become a "real threat" to rival VMWare Inc.

Following Citrix's XenSource deal, speculation arose that Microsoft Corp. (NASDAQ: MSFT) might take an interest in the newly enlarged company, mainly because of the long-standing marketing partnership between the two companies. But Gaggin argues that Microsoft prefers keeping its relationship with Citrix at the partnership level, being distracted with its attempt to takeover Yahoo! Inc. (NASDAQ: YHOO) and the development of its own internal virtualization offering.

Continue reading at TechConfidential.com.

With the deal market drying up, private equity firms need to find unique niches. One player that has been quite successful at this is Silver Lake Partners, which focuses primarily on tech deals. Some of its transactions include Flextronics, Avaya, Sabre Holdings and SunGard Data.

Silver Lake is now expanding its franchise. The firm recently hired Charles Giancarlo, the former Chief Development Officer at Cisco (NASDAQ: CSCO). Keep in mind that he was apparently a candidate for the CEO spot.

Then today, Silver Lake announced big news -- the firm has entered a "long-term strategic partnership" with the California Public Employees' Retirement System (CalPERS). The transaction calls for a 9.9% stake in Silver Lake and there will likely be more investments in future funds.

No doubt, we will see other private equity firms move into the tech space. However, this is far from easy -- especially since Silver Lake is continuing to improve its platform.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Cisco Systems Inc. on Thursday announced a $100 million agreement to buy venture-backed Securent Inc., a three-year-old company that makes security software to help companies better manage different tiers of application users.

Mountain View, Calif.-based Securent, which has 57 employees, has received venture financing from Greylock Partners of San Mateo, Calif., and Onset Ventures of Menlo Park, Calif. Securent makes so-called policy management software, which advances security beyond basic gatekeeper, or single sign-on, technology to enable companies to manage different security levels for different employees.

Continue reading Cisco grabs security software maker in $100M deal at Tech Confidential

Network equipment maker BigBand Networks Inc. (NASDAQ: BBND) could be on the block, according to a report in Light Reading. The online publication's Cable Digital News site says BigBand's announcement that it would stop producing its cable modem termination system, or CMTS, product line could clear the way for a sale of the company, which makes technology that enables service providers to offer their video and data services across coaxial, fiber and copper networks.

Shutting down the product line, which was unable to grab significant market share from big rivals like Cisco Systems Inc. (NASDAQ: CSCO), makes BigBand more attractive for suitors including Arris Group Inc. (NASDAQ: ARRS), which already has a CMTS offering. Another possible buyer is Harmonic Inc. (NASDAQ: HLIT), the report says.

Continue reading about BigBand at Tech Conifdential.

This morning, 3Com (NASDAQ: COMS) announced that private equity firm, Bain Capital, would put it out of its misery and pay $2.2 billion in cash for the company. 3Com has lagged so far behind that it has been painful to watch. 3Com and Cisco Systems (NASDAQ: CSCO) indeed could provide at least two to three chapters in an investing teaching and history book. Here's the Cliffs Notes version:

Summer of 1994 was a tough technology environment. Technology had a great run from 1990 through 1994, till summer that is. Valuations contracted and investor fatigue set in for about four to five months. I was traveling through Silicon Valley with a couple of British portfolio managers, visiting companies. One day we had a breakfast meeting with then CEO Eric Benamou of 3Com and lunch with a senior VP at Cisco (whose name escapes me). Benamou was an intellectual, a refined man, but did not possess the street smarts necessary for a tech company CEO. He was arrogant, and bluntly declared that Cisco's days were numbered and 3Com would acquire any tech company necessary to achieve total domination. OK, great, and we went on to Cisco for lunch.

The senior VP was a classy guy, never said a bad word about any competitor and just explained Cisco's game plan and execution philosophy. Here is the funny part: In July 1994, BOTH companies had a market capitalization of $9 billion.

3Com went on to make some stupid acquisitions like US Robotics, paying top dollar for a company in serious decline with evaporating margins. 3Com has never been the same since. Eric Benamou went on to pursue "other interests" and 3Com has languished at the bottom of the tech food chain.

One of the hottest IPOs of the year is Aruba Networks Inc. (NASDAQ: ARUN), which is up 82.5% since its debut in late March. The company builds technologies to secure large corporate wireless networks. After all, with the proliferation of devices – such as Research in Motion's (NASDAQ: RIMM) BlackBerry – it is a big market opportunity.

Well, another firm wants a piece of the action: Aerohive Networks.

In fact, the company recently raised its second round of venture capital for $20 million. The lead investor is the venerable Kleiner Perkins

Aerohive develops so-called "cooperative control" wireless LAN (WLAN) access points. Basically, it makes it easier for companies to deploy wireless services – and at lower costs. This is done by sharing information in optimized groups, which are called "hives."

No doubt, Aerohive faces intense competition, such as from Cisco Systems Inc. (NASDAQ: CSCO). But, in the WLAN market, there is always room for a better product.

Besides, Aerohive has a top notch management team. Keep in mind that their last deal – NetScreen – sold for a cool $4 billion to Juniper Networks (NASDAQ: JNPR).

To check out more recent venture capital funding news, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Two red hot areas of IT: security and on-demand.

Companies like Cisco Systems, Inc. (NASDAQ: CSCO) have been paying high premiums to buy up security companies and on-demand players like WebEx. There have also been strong IPOs in the sector, such as Salesforce.com (NYSE: CRM).

To get a piece of the action, Goldman Sachs Group (NYSE: GS) is putting $50 million into Perimeter eSecurity, which provides a variety of security services like intrusion detection, email filtering, endpoint protection and so on. And, yes, the company delivers this using the on-demand model.

With the money, I suspect that Perimeter will start doing deals. In fact, it's a good bet we'll hear some announcements soon.

However, there is still lots of competition. For example, Symantec Corp. (NASDAQ: SYMC) and McAfee Inc. (NYSE: MFE) have their own on-demand solutions. There are also a number of scrappy startups. Even Google Inc. (NASDAQ: GOOG) is interested. After all, the company has made several acquisitions in the security area, such as the recent deal for Postini for a cool $625 million. With that kind of price tag, I can see why Goldman is interested in the space.

To check out other recent venture capital funding news, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.