Cisco Buys BroadSoft for $1.71 Billion in Software Push

Cisco Buys BroadSoft for $1.71 Billion in Software Push

Cisco Systems Inc will buy software company BroadSoft Inc for $1.71 billion (roughly Rs. 11,102 crores), it said on Monday, in a deal that boosts Cisco's collaboration tools and helps the company diversify its offerings away from switching and routing.

Shares in BroadSoft, which specializes in software used by major cable and telecommunications networks, rose 1.35 percent after Cisco offered $55 per share for the company, giving shareholders a premium of 2 percent to last Friday's closing share price.

The offer price is more than 25 percent higher than where BroadSoft shares were trading before Reuters reported on August 30 that the company was exploring a potential sale.

The purchase gives Cisco a stronger foothold in selling products to big telecom firms which can then provide integrated mobile, video, voice and other forms of electronic communications to their small and medium-size business customers.

Rob Salvagno, Cisco's vice president of corporate development, said in an interview that BroadSoft's products, which are delivered over the cloud, or the Internet, will improve Cisco's collaboration portfolio. Cisco's current products in that unit such as WebEx, are based on premise, which means they are installed on devices.

Cisco shares also rose about 1 percent.

"This is a smart acquisition that gives Cisco more firepower to sell into its massive installed base over the coming years," said Daniel Ives, chief strategy officer at research firm GBH Insights.

The deal, valued at $1.9 billion including debt, is expected to close during the first quarter of 2018, the companies said in a statement.

After the deal, BroadSoft employees will join Cisco's unified communications technology group.

Cisco, like other large technology companies, has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.

BroadSoft provides software and services that enable mobile, fixed-line and cable service providers to offer so-called unified communications over their internet protocol networks.

BroadSoft has historically sold its products to large telecommunications companies such as Verizon Communications Inc and AT&T Inc, which then resell the software to their business customers. Cisco and BroadSoft share a lot of customers, Salvagno added.

The BroadSoft deal is Cisco's second major acquisition this year following a $3.7 billion deal for privately held AppDynamics Inc in March.

"With BroadSoft, Cisco will be able to cover a wider swath of the market," Drexel Hamilton analyst Brian White wrote in a note.

Jefferies and Qatalyst Partners advised BroadSoft on the deal while Bank of America advised Cisco.

© Thomson Reuters 2017


For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Further reading: Cisco, BroadSoft, Telecom, Internet
iPhone Is a Platform for Artificial Intelligence, Says Apple COO Jeff Williams

Related Stories

Share on Facebook Tweet Snapchat Share Reddit Comment



© Copyright Red Pixels Ventures Limited 2021. All rights reserved.
Listen to the latest songs, only on