The rate of company acquisitions in the recent may be getting another boost with the latest victim being Gigamon Inc (NYSE:GIMO). A recent report has it that the Santa Clara-based network monitoring and security software maker is exploring a possible sale. People familiar with the report have stated that Hewlett-Packard Enterprise and Cisco Systems are among the many companies that could be eyeing the acquisition deal.
The company has also been reported to be preparing to hold talks with other interested potential suitors the likes of Sunnyvale-based Juniper Networks, Inc. (NYSE:JNPR), and San Jose-based F5 Networks, Inc. (NASDAQ:FFIV) among others. According to Reuters, investment bank Goldman Sachs will on behalf of Gigamon engaged in the talks with these companies. Apparently, there are also a handful of private equity firms, the likes of Thoma Bravo Llc. Riverbed Technology, which has expressed interest in the deal.
Possible sale spikes up Gigamon’s stock
The US software maker is also being targeted by activist hedge fund Elliott Management Corp, which apparently has been calling for a strategic review of Gigamon. As of May Elliott reported a 15.3% stake in the company but it declined to deviate into further details.
The new push of a possible sale resulted into Gigamon’s shares hitting a high of $44.55 closing the day at $42.85. The company’s market cap was at about $1.5 billion when it closed at $39.30 on Friday. This was a surprise spike given that Gigamon, which employs about 370 had lost more than a third of its share value since November.
Competition has been stiff
Gigamon customers include large data centers, which install software to boost the flow of traffic and prevent bottlenecks. The competition has been very tight from the likes of Ixia, which was, however, bought earlier this year by Keysight Technologies at a cost of $1.6 billion.
Gigamon has not initiated any sale process as of yet however.
A number of other companies such as LifeLock Inc and Qlik Technologies have also sold themselves in recent years following an aggressive push by Elliott. Meanwhile, Gigamon’s stock traded at $42.85 witnessing an increase of $3.52 or 8.96%.