Fluke to buy network company

Visual Networks of Rockville brings $79.7 million


A Rockville technology company said yesterday that it has agreed to be acquired for $79.7 million by a subsidiary of the Danaher Corp. of Washington.

Visual Networks Inc., which is traded on the Nasdaq stock exchange, will sell itself for $1.83 a share to Fluke Electronics Corp., which is to absorb the company into its Fluke Networks division. The news pushed Visual Networks' stock up 29 cents to $1.75 a share yesterday.

Its stock peaked at more than $80 a share in early 2000, the height of the high-tech investment heyday.

Visual Networks' products measure the performance of computer networks and also monitor software applications operating on those networks.

The company's core product is Visual UpTime Select, a hardware appliance that runs software "modules" designed by the company.

Visual Networks reported $32.6 million in revenue in the first nine months of this year, down 15 percent for the comparable period last year. It lost $3.2 million, or 9 cents a share, in the nine months. It has been profitable only two of the last five years - in 2002 and 2004.

But Kaufman Bros., a New York investment bank, upgraded the company to "buy" from "hold" in October, noting that a new bandwidth management product set to be released early next year should increase revenues in the near term.

David Peikin, a spokesman for Visual Networks, said the 12-year-old company expanded into applications performance management several years ago and found it a highly competitive field.

"That's a huge market and that market is dominated by companies that are 10, 20, 30 times our size with very deep pockets and very strong customer relationships that kind of dwarf our capabilities," he said.

"Consequently, being a part of Fluke Networks offers us strong global distribution, great organizational depth and significant financial stability."

Visual Networks employs more than 130 people, with many of them at its Rockville headquarters.

Peikin said questions about the fate of its staff would have to be answered by the acquirer.

A Fluke Networks spokesman said he wouldn't "speculate" on the employment picture before the deal closes, which is expected in the first three months of next year.

Paul Stone, director of worldwide marketing services for Fluke Networks, said the company sees the acquisition as an opportunity to bolster its services.

"They have some strong offerings in some technologies that we are interested in," he said.

Lawrence S. Barker, chairman, president and chief executive of Visual Networks, will receive a cash bonus of $180,000 if the merger is completed. Three other company executives would earn bonuses of $50,000 to $100,000.


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