Cisco Systems Inc. (Nasdaq: CSC) is buying Viptela Inc., a software-defined wide area network (SD-WAN) company, for $612 million in cash. As part of the deal, Cisco expects to benefit from the target's technology performance and simplicity delivered through the cloud.

Viptela provides cloud-based technology that manages SD-WANs and looks to reduce the costs of interconnecting dispersed enterprise networks. A dispersed enterprise network is a network of plants that are electronically linked so that the interconnected plants may share manufacturing and production resources. Managing the network has become more complex and challenging as applications move to the cloud, workers become more mobile, and droves of Internet-based devices are added to the network each day, explains Cisco. To keep up with the evolving times, customers are shifting toward SD-WAN technology to help manage and orchestrate their network deployments. The target will join Cisco’s enterprise routing team within the networking and security business.

Cisco, headquartered in San Jose, California, is one the world’s biggest manufacturers of networking technology. The deal for Viptela aligns with Cisco’s cloud technology approach as the company transitions to software-driven, automated networks. The transaction is expected to close in the second half of 2017.

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While Cisco has been quite active lately, businesses turning to SaaS has been one of the drivers in tech M&A. Recent acquisitions by Cisco include: the purchase of AppDynamics, a software provider for fine-tuning business systems, for $3.7 billion; the acquisition of ContainerX, a developer of data management technology; and the deal for Jasper Technologies Inc. for $1.4 billion. Other software and cloud-based acuisitions include: Thoma Bravo’s backing of enterprise software developer Plainview; Apollo Global Management LLC’s (NYSE: APO) agreement to acquire Rackspace Hosting Inc. (NYSE: RAX), a cloud services company; and Oracle Corp.’s (NYSE: ORCL) buying of NetSuite Inc. (NYSE: N).

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Kamaron Leach

Kamaron Leach

Kamaron Leach joined SourceMedia in 2016, serving as Reporter of Mergers & Acquisitions. Kamaron writes the Finance Finesse column about investment banking and lending, and also covers the media and entertainment sector.
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