Another Big, Expensive Acquisition for Cisco Systems
Networking hardware giant Cisco Systems (NASDAQ: CSCO) has always been an acquisitive company. From fiscal 2013 through fiscal 2017, Cisco spent a whopping $16.2 billion buying up companies. That spending spree hasn't helped revenue, which is down slightly over that period, but it has helped Cisco add diversity to its business. The core switching and routing segments, once Cisco's growth engines, are stagnating.
Cisco announced its 200th acquisition on Monday. The company agreed to pay $1.9 billion, net of cash and assuming fully diluted shares including conversion of debt, for BroadSoft (NASDAQ: BSFT), a provider of cloud communications, collaboration, and contact center services. Collaboration has been one of Cisco's growth businesses in recent years, although the segment produced a small decline in revenue during fiscal 2017. Adding BroadSoft to the portfolio should help return the collaboration business to growth, but the price Cisco is paying looks a little rich.
Image source: Cisco Systems.
Source: Fool.com
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