Cisco Systems Inc.
) recently completed its acquisition of privately-held Cariden
Technologies. The company spent $141 million in cash and
retention-based incentives for the acquisition. The deal was
announced last month.
California-based Cariden Technologies' traffic management
solutions help service providers to optimize the operation of
their networks. Its main customers include
Verizon Communications Inc.
), Deutsche Telecom, SingTel and Swisscom.
Cariden will now become a part of Cisco's Service Provider
Networking Group unit, augmenting Cisco's offering to service
providers. The integration of Cariden's network software will
further Cisco's strategy of increasing its software-centric
solutions to streamline network management. The deal will allow
the company to expand and differentiate its offerings with regard
to networking infrastructure.
Management stated that the acquisition will enable telecom
service providers to improve the visibility, programmability and
efficiency of converged networks, ultimately growing their
businesses. Additionally, the deal supports Cisco's Open Network
Environment strategy, also known as Cisco ONE, which aims to help
businesses increase infrastructure agility, simplify operations
and instill greater application visibility and awareness.
Cisco is on an acquisition spree. Earlier, in November, the
company had announced its intention to acquire Meraki and Cloupia
for $1.2 billion and $125 million, respectively, as part of its
cloud and networking expansion strategy.
Cisco Systems is a leading provider of IP-based networking and
other products. The company's first-quarter earnings of 44 cents
beat the Zacks Consensus Estimate by 3 cents. Reported revenue
was up 5.5% from the year-ago quarter.
Although Cisco is taking steps to lower its cost structure by
reducing headcount, it is not ignoring growth opportunities.
We believe that these acquisitions will broaden Cisco's
customer base and network offerings, providing the company with a
significant competitive edge over its peers, namely
Juniper Networks, Inc
F5 Networks, Inc
), which have been picking up market share.
Currently, Cisco has a Zacks #3 Rank (Hold).
CISCO SYSTEMS (CSCO): Free Stock Analysis
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