Netifice Communications this week announced it is acquiring Aventail's Managed Secure Sockets Layer (SSL) VPN Services business unit, including all 120 customers, 85 employees and network assets.
Netifice and Aventail are privately held companies and are not disclosing the financial details of the deal. But Netifice's CEO Craig Young says his company is paying a "significant amount of cash" for Aventail's Managed SSL VPN unit.
The deal also includes a four-year agreement between the companies where Aventail will supply its SSL gear to Netifice.
"Of the 120 customers, most are from very large global corporations," says Evan Kaplan, president and CEO, Aventail. "It's a very profitable business with about 95 percent market share."
About half of the customers deal directly with Aventail. The other half stem from Aventail's healthy wholesale business. AT&T, BT Spain, IBM Global Services, Infonet, MCI, and Sprint all resell the company's Managed SSL VPN Services.
Aventail says it's selling its service business to squarely focus on its equipment business, which is growing quickly, Kaplan says. On the SSL VPN equipment side Aventail competes with Juniper Networks and Array Networks.
Aventail plans to use the infusion of cash to expand its equipment business.
In addition to its Aventail acquisition, Netifice also announced a US$55 million round of financing, which funded the acquisition. The funding comes from Netifice's existing investors Columbia Capital, Boston Millennia Partners, Dolphin Equity Partners and HIG Capital, and two new investors -- Fidelity Ventures and Rho Ventures.
Young says the service provider will use the remainder of its investment to grow its existing remote access VPN services and expand its service portfolio. Netifice is planning to buy or partner with a voice-over-IP service provider and offer users bundled VPN and VoIP services within the next six months, Young says.