(Reuters) - Hewlett Packard Enterprise Co (HPE.N) said on Monday it would buy Silver Peak, a developer of tools to enhance the performance of wide area networks (WAN), for about $925 million in cash.
California-based Silver Peak will be combined with HPE’s Aruba business unit, which makes Wi-Fi network gear, the company said.
The deal is an effort by HPE to strengthen its software-defined wide-area network (SD-WAN) capabilities, at time when demand for the service is increasing with many workers doing jobs remotely due to the COVID-19 pandemic.
Businesses around the world rely on WAN, a form of telecommunication networks, to connect devices from multiple locations.
“We are seeing an accelerated need for technology like this because we are going to be working from home quite a bit,” Keerti Melkote, president of Intelligent Edge for HPE, said in an interview. “The pandemic only accelerated our view that this was going to be a very strategic asset.”
The two parties started to explore a deal late last year, Melkote said.
While the talks were put on hold when the pandemic hit the United States in March, they resumed as the market stabilized and HPE saw a surge in demand for remote solutions and cost-saving opportunities.
HPE plans to offer Silver Peak’s SD-WAN capibities to its global customer base. It expects the SD-WAN market to grow to $5 billion from $2 billion over the next several years.
Founded in 2014, Silver Peak has annual revenue of over $100 million. It has raised over $210 million in fundings so far and was last valued at $465 million in June 2018, according to PitchBook data.
JP Morgan served as finansial adviser for HPE.
Reporting by Krystal Hu in New York and Ayanti Bera in Bengaluru; Editing by Sriraj Kalluvila and Tom Brown