Cisco announces intent to acquire BroadSoft during the first quarter of 2018

Cisco announced Monday it intends to acquire BroadSoft, a global communication software and service provider, for $1.9 billion. The purchase provides Cisco an outlet for selling communication tools as it moves from switches and routers to software and services launched in the cloud.

Cisco will pay $55-a-share-cash in exchange for each BroadSoft share and take on the company’s debt. Before the buyout is finished, both businesses will continue to function independently. After the buyout is finished, BroadSoft employees will become a part of Cisco’s Unified Communications Technology Group under the Applications Group. The acquisition should be finalized during the first quarter of 2018 following regulatory approval.

“Together, Cisco and BroadSoft will deliver a robust suite of collaboration capabilities across every market segment,” said Rowan Trollope, senior vice president and general manager of Cisco’s Applications Business Group. “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.”

Cisco’s traditional business of making switches and routers has experienced a decline in revenues as of late. Consequently, Cisco, along with other tech giants, has turned its attention to high-growth areas like security, the internet of things (IoT) and cloud computing.

BroadSoft offers software and services, which allow service providers to offer unified communications across their internet protocol networks. Traditionally, the business has sold its products to telecom companies like Verizon and AT&T, which resell the products to their customers. Cisco and BroadSoft already share many customers. By integrating the company’s open interface and standards-based cloud voice and contact center solutions, Cisco aims to fill in gaps in its current product portfolio.

“As businesses continue to move toward the cloud in search of simplicity and speed, joining Cisco will allow us to deliver best-in-class collaboration tools and services,” Michael Tessler, president and CEO of BroadSoft. “BroadSoft’s hosted offerings, sold through the Service Providers and aimed at small and medium businesses, are highly complementary to Cisco’s on-premises and enterprise-centric HCS offerings. Together, we can inspire teams to create, collaborate and perform in ways never before imagined.”

The news follows Cisco announcing last week it intends to purchase machine-learning startup Perspica, which will support and advance the digital transformation of AppDynamics, a software business Cisco acquired for about $3.7 billion earlier this year. Cisco said the recent buyout marks the 200th company it has acquired.

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