Cisco is on a heavy acquisition mode; this is their second acquisition for this month and a strong one. Cisco, the network equipment giant had decided to buy out the mobile equipment making, “Starent Networks” for a huge $2.9 Billion. The price of the deal is based on a premium of 21% over the Monday’s closing share prices. Cisco’s plan is to tap the growing smartphone market, which requires high-speed Internet access. The Starent Company will be Cisco’s new mobile tech department and will be led by the existing Ashraf Dahod.
Cisco wants to speed up their acquisitions rate and wants to be really aggressive in their approach. Only this October, they took over the Tandberg, a Norwegian video conferencing company for a whopping $3 billion. John Chambers, the Cisco chief, wants to be even more aggressive with the acquisitions over the period of the next 12 months.
The Starent Networks, a 9 year old company, is a leading firm as the wireless infrastructure provider. The firm has been making equipments for wireless providers like ATnT, Verizon, fortune 500 etc. The company has over 1000 employees world wide and it reported a $254.1 million in revenue last year, which is 74% more than last year. This deal will not be making any profits till 2012, however from the future point of view, this deal is very crucial. The acquisition will be completed by the beginning of 2010.