Cisco Systems Inc will buy USA telecommunications software company BroadSoft Inc in a deal valued at $1.9 billion, as the world's largest networking gear producer shifts from its stagnating legacy business of switches and routers.
Cisco is to buy unified communications and collaboration software company BroadSoft in a $1.9bn deal. Broadsoft shares were up 1.5 percent during premarket on Monday.
Rowan Trollope, senior vice president and 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". Its flagship products include BroadWorks, an application platform hosted on-premises by service providers, and BroadCloud, its cloud-based platform for service providers "looking for an accelerated time-to-market with business ready services". This acquisition gives Cisco the most comprehensive set of collection solutions for their customers.
After the deal, BroadSoft employees will join Cisco's unified communications technology group.
It also offers software enabling customers to offer unified communications-as-a-service (UcaaS), either from their own platform or from Broadsoft's own BroadCloud software-as-a-service or platform-as-a-service delivery platforms.
The acquisition is expected to close in the first quarter of next year, subject to the usual closing conditions and regulatory review. It has historically been offering its products to big telecom companies like AT&T and Verizon, which then resells the software to their clients.
Another legacy technology firms have been looking in high-growth areas like security, cloud computing and the Internet of things.
The BroadSoft deal would be Cisco's second major acquisition this year following the US$3.7 billion acquisition of privately held AppDynamics in March.
While Cisco declined Reuters" request for comment, BroadSoft decided "not to immediately return a request for comment'.