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Expand Snaps Up DiskSites

WAN optimization specialist Expand Networks today snapped up WAFS vendor DiskSites in an all-stock deal that gives DiskSites shareholders a 13.5 percent stake in the combined company.

Amir Chitayat, Expand Networks' president, would not put a financial value on the deal, explaining to Byte and Switch that he is "not at liberty" to discuss the valuation. The price tag, however, is unlikely to match the $78 million that another WAN optimization specialist, Packeteer, coughed up for WAFS vendor Tacit last week. (See Packeteer Picks Tacit, Sources: Packeteer Eyeing Tacit, and Packeteer Buys Tacit.)

DiskSites, with around 25 employees, is a much smaller firm than the 100-strong Tacit, and Expand, unlike Packeteer, is a private company. Nonetheless, this latest deal underscores the growing M&A momentum in this space. (See Cisco Acts on Actona, Cisco Chomps FineGround, Peribit Deal: More to Come, F5 Snaps Up Swan Labs, and WAFS vs WAN Optimization: No Contest.) Other recent activities have also reflected the growing importance of WAFS and WAN optimization, such as Riverbed's decision to go for an IPO. (See Riverbed Makes It Official and Sources: Riverbed Reaches for IPO.)

The Expand/DiskSites deal is not surprising. The two firms signed an OEM agreement last August, and DiskSites' technology is already available within Expand's Compass family of hardware. (See Expand Intros WAFS, CIFS Acceleration.) "The main driver [behind the deal] is tighter integration between the technologies and the ability to launch additional functionality," explains Chitayat, although he won't reveal specific plans.

Chitayat also expects that, with Expand now holding DiskSites' intellectual property, there will be more long-term OEM opportunities.

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