Networking equipment maker
Cisco Systems Inc.
) completed the acquisition of IT energy management solution
provider JouleX for $107 million in cash and retention-based
incentives in exchange for all shares of JouleX.
Atlanta-based JouleX, a privately-held IT provider of energy
management software, was founded in 2009. The JouleX Energy
Manager (JEM) provides automatic updates on energy consumption by
all devices in the network. This information allows enterprises
to monitor and control utilization of energy in offices, data
centers and facilities management systems. This enables efficient
cost management without hampering profitability.
Upon the completion of the deal, JouleX will become a part of
Cisco's Industry Solutions Group, thus augmenting Cisco's
offerings for service providers. The acquisition will allow Cisco
to expand beyond hardware offerings and generate recurring
Cisco Systems is a leading provider of IP-based networking
services and other products. As a part of its acquisition
strategy, Cisco bought 11 companies in 2012. In January, Cisco
spent $475 million to purchase Intucell, a company that develops
advanced self-optimizing network (SON) software to enable mobile
carriers to plan, configure, manage and optimize cellular
networks automatically. It continued its acquisition spree and
bought SolveDirect, which provides cloud-based solutions for
enterprises and service providers. Recently, Cisco acquired
data-virtualization start-up Composite Software for $180
We believe that these acquisitions will broaden Cisco's
customer base and network offerings, providing the company with a
significant competitive edge.
Cisco's revenues in the second quarter of fiscal 2013
increased 1.7% sequentially and 5.2% year over year to $12.1
billion. Products (78.0% of total revenue) were up 3.3% year over
year to $9.4 billion. Services (22.0% of total revenue) jumped
12.5% year over year to $2.7 billion.
Cisco carries a Zacks Rank #3 (Hold). Other companies in the
sector that also look attractive include
). While Infinera Corp. and Silicom carry a Zacks Rank #2 (Buy),
Juniper carries a Zacks Rank #3 (Hold).
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