Cisco Systems Inc.
) recently announced its plan to buy privately-held Cariden
Technologies, Inc. for $141 million in cash. The acquisition is
expected to close in the second quarter of 2013, subject to
fulfillment of certain customary closing conditions.
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.
Upon the completion of the deal, Cariden will 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
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 Systems is a leading provider of IP-based networking and
other products. Although Cisco is taking steps to lower its cost
structure by reducing headcount, it is not ignoring growth
This is Cisco's third acquisition in November and is in line
with its growth strategy. Earlier this month, Cisco announced its
intention to acquire Meraki and Cloupia for $1.2 billion and $125
million, respectively, as part of its cloud and networking
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.
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.
Cisco has a Zacks Rank #2 (Buy).
CISCO SYSTEMS (CSCO): Free Stock Analysis
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