Cisco Systems Inc. (Nasdaq: CSCO) agreed to buy BroadSoft Inc. (Nasdaq: BSFT) for about $1.9 billion to expand further into software and cloud services. Cisco will pay $55 a share in cash, according to a statement from the company.
Cisco has had an acquisitive year as CEO Chuck Robbins adapts to a shift in the networking industry toward less-expensive software-based services and away from traditional hardware, which provides Cisco with most of its revenue. The San Jose, California-based company has announced eight acquisitions in 2017 before today’s deal, according to data compiled by Bloomberg.
BroadSoft, which has a market value of about $1.7 billion, had been working with Jefferies Group to seek suitors. It earlier attracted interest from buyout firms Searchlight Capital Partners and Siris Capital Group, people familiar with the matter said Oct. 4. Bloomberg reported over the weekend that a deal with Cisco was close.
BroadSoft, based in Gaithersburg, Maryland, provides cloud communication services to businesses in about 80 countries, according to its website. Founded in 1998 by former Alcatel USA vice president Michael Tessler and Celcore executive Scott Hoffpauir, the company went public in 2010. Tessler serves as chief executive officer.
Cisco paid $3.7 billion to acquire AppDynamics Inc. in March, a deal that was announced hours before the fast-growing software maker was due to price its initial public offering two months earlier. In May, Cisco agreed to buy software-based networking startup Viptela Inc. for $610 million.
The BroadSoft acquisition is expected to close during the first quarter of 2018, Cisco said.