In what industry watchers believe the first of many SBC (Session Border Controller) plays this year, Juniper bought Israeli startup Kagoor Networks for $65.5 million in a deal announced earlier this week (Tuesday).  The hefty multiple (more than 13x 2004 sales) caught a lot of attention, given the amount of other SBC companies available in the marketplace.  Companies such as Acme, Jasomi and Netrake can also be potential acquisition and/or IPO targets.  So why $65.5 million for a company that is not yet profitable?  Obviously, Juniper (Nasdaq:JNPR) felt that Kagoor's product was top class, but Kagoor also happens to have key relationships with the same companies that resell Juniper, namely Lucent, NEC and Siemens. 

It was surprising for some to see Juniper acquiring an SBC vendor, when all along the street kept dreaming up scenarios such as a wireless gambit, an Ethernet company purchase, or a Layer 4-7 play.  Other folks in the Street were even speculating Juniper might acquire Sylantro.  But in the end, Kagoor can play a key role in Juniper's Infranet initiative and is the first piece to fall into piece in the 2005 SBC puzzle.