Allot Communications to buy Oversi Networks for $17 million

Telecom Lead America: Allot Communications is set to
acquire Oversi Networks, a provider of rich-media caching and content delivery
solutions for Internet video and peer-to-peer (P2P) traffic.

Allot will be paying $16 million in cash, as well as up
to $5 million based on Oversi’s performance during 2012.

Oversi will contribute approximately $2 million in
revenues per quarter.

Gross margins for the Oversi offering should be within
Allot’s current gross margin range.

Operating expenses will increase by approximately $2.0
million per quarter, which will impact earnings per share by approximately
$0.02 per share in the 4th quarter.

The incorporation of Oversi’s technology with Allot’s
Service Gateway will allow telecom service providers to manage the increasing
volume of video traffic on their networks. 

Allot’s fixed line customers report that video traffic
currently uses over 50 percent of bandwidth and is rapidly increasing.  On
the wireless side, according to Allot’s latest Global MobileTrends report,
video now represents 42 percent of mobile data traffic worldwide.

Oversi’s caching and acceleration solutions help both
fixed and mobile service providers to relieve the heavy network congestion
associated with Internet video traffic.  

Its technology identifies content and caches it at the
edge of the network, therefore achieving significant bandwidth saving and
minimizing long delays in video delivery. By assuring quality of experience,
Oversi’s solutions enable service providers to offer tiered services at
different price levels, increasing average revenues per user (ARPU). Its
solution has been widely deployed at several large and medium service providers
to date. 

Rami Hadar, Allot’s President and CEO, said the
acquisition of Oversi is another step in realizing our Service Gateway vision.

By adding video caching, Allot offers its customers a
comprehensive video solution that includes the critical caching and
optimization services required to manage the ever-increasing volume of
over-the-top video on the Internet. 

Oversi’s CEO David Tolub said the Allot Service Gateway
will accelerate its market penetration by offering a more robust video

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