The big two-oh-oh: Cisco gobbles comms biz Broadsoft for $1.9bn

Is Switchzilla trying to buy its way out of legacy?

Cisco has snapped up its two-hundredth acquisition in the form of unified comms biz Broadsoft for $1.9bn (£1.4bn) – its latest attempt to move away from its lacklustre legacy business of switches and routers.

The Maryland-based outfit sells software and services that enable mobile, fixed-line and cable service providers to offer unified communications over its internet protocol networks.

Rob Salvagno, vice president of Cisco Corporate Development, said: "Cisco recently marked a significant milestone with our 200th acquisition. Acquisitions continue to be a core part of our innovation strategy and over the past two years have helped Cisco accelerate or enter areas such as IoT, application intelligence, AI, hyperconvergence and SD-WAN."

Just last week Cisco gobbled machine-learning upstart Perspica to beef up its analytical muscle at the performance management AppDynamics division. The acquisition is intended to bolster AppDynamics' activities, a firm purchased by Cisco in January in a deal valued at $3.7bn.

Eager to find new lines of revenue amid its stagnating core business, Cisco has been keen to talk up its high-growth areas such as security, IoT and cloud computing.

However, when it reported humdrum growth in security of 3 per cent to $558m (£433m) for its fourth quarter results in August, the stock market was quick to punish the business by wiping 2.5 per cent off its market capitalisation.

Switching and routing both declined by 9 per cent for the quarter, representing $3.4bn and $1.9bn of sales respectively.

The acquisition is expected to complete during the first quarter of calendar year 2018, subject to customary closing conditions and regulatory review.

In a canned statement, Rowan Trollope, general manager of Cisco's Applications Business Group, said: "We believe that our combined offers, from Cisco's collaboration technology for enterprises to BroadSoft's suite for small and medium businesses delivered through Service Providers, will give customers more choice and flexibility." ®

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