The Haifa District Court today approved the agreement for the sale of Expand Networks Ltd., which is in liquidation, to Riverbed Networks Inc. (Nasdaq: RVBD) for about $10 million. The exact amount has not yet been decided.
The request to sell Expand Networks was received a long time ago, and some of its investors say that it happened too late. The sale will officially write off the $100 million invested in the company by DFJ Tamir Fishman Ventures Ltd. (TASE: TFVC) (which owns a 15% stake), TechnoPlus Ventures Ltd. (TASE:TNPV), Challenge Fund - Etgar, Vertex Venture Capital, Discount Investment Corporation (TASE: DISI), Eurocom Group, Intel Capital, and Time Warner Inc. (NYSE: TWX).
In the beginning, in 1998, Expand Networks was considered the leader in its field of enterprise network optimization solutions. But the picture changed in 2002-04, when computer equipment giants like Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) entered the field, and Expand began competing in a saturated market.
Over the years, the company received acquisition offers, some of which reached $50-60 million. Radware Ltd. (Nasdaq: RDWR), which operates in a related field, was one of the companies interested. In retrospect, the decision not to sell was wrong.
Although Expand Networks won recognition for the capabilities of its products (at least by Gartner Group), but the company's business performance was not up to par. It lost $3 million on $11 million revenue in 2010, and its cumulative losses rendered it unable to repay a loan to Plenus Venture Lending Fund in September 2011, which in turn led to Plenus to petition the court for the company's liquidation.
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2012
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