November 29, 2012
November is the month for acquisitions at CiscoÂ (News - Alert) Systems. This week, the company announced it will acquire Cariden Technologies for about $141 million in cash. The deal should be completed in Q2 of 2013.
The planned purchase follows two other acquisitions announced earlier this month. Cisco SystemsÂ (News - Alert) announced it will pay $125 million for Cloupia and $1.2 billion for Meraki, according to the Silicon Valley/San Jose Business Journal.
â€œCisco entered the January quarter with roughly $7.5 billion in U.S. cash, which along with strong cash generation appears more than sufficient to support the recent M&A activity as well as the dividend and share repurchase plans,â€� Lubert said.
Cariden Technologies offers design, network planning and traffic management solutions for telecommunications service providers. Cariden customers include Deutsche Telecom, SingTel, Swisscom and VerizonÂ (News - Alert), All Things D reported.Â Cariden has been a Cisco partner for some ten years and is a provider for more than 60 networks worldwide, TMCnet said.
"The Cariden acquisition reinforces Cisco's commitment to offering service providers the technologies they need to optimize and monetize their networks, and ultimately grow their businesses," Surya Panditi, senior vice president and general manager, Cisco's Service Provider Networking Group, said in a company statement. "Given the widespread convergence of IP and optical networks, Cariden's technology will help carriers more efficiently manage bandwidth, network traffic and intelligence.Â This acquisition signals the next phase in Cisco's packet and optical convergence strategy and further strengthens our ability to lead this market transition in networking."
Analysts appear positive about the deal.
â€œWe believe Cisco should â€¦ benefit from Caridenâ€™s MPLS expertise, which is a dominant WAN technology that may help Cisco better compete as the routing and optical layers converge,â€� Lubert told Barronâ€™s.
In addition, Brian Marshall, an analyst with ISIÂ (News - Alert), told All Things D that Cisco is interested in software-defined networking (SDN.) â€œCariden, it turns out, has done some fundamental work on the SDN, and over the summer announced a blueprint for doing SDN-based network infrastructure,â€� the report explained.
Cisco also selected Cariden because it has strong traction with leading service providers, Shailesh Shukla, vice president and general manager of Ciscoâ€™s Service Provider Networking Software and Applications Group, told TMCnet.Â
Edited by Rich Steeves