Riverbed buys Mazu Networks for $25M cash

Publicly traded Riverbed Technology acquired privately-owned Mazu Networks for $25 million in cash, the companies announced Wednesday.

There are the usual incentives involved for good performance, but the bar is quite high. Mazu might get as much as $22 million more in cash at the end of a 12-month period - if they book $35 million in business. Since Mazu had $18 million in bookings during the past twelve months, they'd have to double sales in a down economy to get the extra payment.

Riverbed says the impact to non-GAAP earnings will be break-even in 2009 and adding to the bottom line in 2010.

Riverbed, a WAN optimization solutions company, gets Mazu's analysis and reporting software that provides a real-time view of applications usage and performance - good for VoIP, UC and video optimization, as well as security monitoring to spot anomalies.  Customers could run Mazu's software before they install a Riverbed solution to figure out what needs to be optimized, and then later run it to ensure that all the improvements are working as anticipated; they also get data in a nice tidy presentation package including customizable dashboards and reports.

GigaOm points out that the VC took a bath on this deal.  Investors put in more than $40 million in cash into Mazu.

For more:
- GigaOm reports here.
- Riverbed press release.

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