June 2, 2005 12:44 PM PDT

Citrix buys NetScaler for $300 million

Citrix has agreed to buy network traffic specialist NetScaler for $300 million, the software maker's latest foray into new markets via an acquisition.

The companies announced the deal, a mix of cash and stock, on Thursday and expect to complete it by October.

NetScaler said its traffic compression and balancing technology helps to quickly shuttle data between Internet servers, making Web sites and private corporate networks run faster and reliably. The San Jose, Calif., company competes with Nortel Networks, Cisco Systems, Radware and F5 Networks in that market, which is expected to reach about $3 billion by 2007.

NetScaler estimates that up to 75 percent of all Internet users go through its systems every day, with Google, Amazon.com, Microsoft's MSN, Ford and United Airlines among its clients.

The company is Citrix's third acquisition in about a year. Last fall, Citrix spent $50 million on Net6, which makes security programs for virtual private networks. It also bought Expertcity last year. That company's software gives people access to their PCs from other computers via the Web, a market known as "remote access."

Citrix plans to tie NetScaler's products into its own line of networking software, which allows companies to run Windows applications on low-cost, non-Windows computer terminals via links to central servers.

NetScaler employs about 200 workers. B.V. Jagadeesh, its chief executive, is expected to join Citrix and lead its application networking group.


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