Cisco Systems Inc. soon to close the deal with BroadSoft and acquire the Software company at $2 Billion, a close source told the Associated Press. BroadSoft is a US Telecommunications software firm working with Jefferies Group to seek suitors at a market value of $1.7 billion.
The source working closely on the matter didn’t wish to disclose the name since the discussions are confidential. If the deal finalized as planned, the official announcement may come through even on Monday.
The world’s largest networking equipment manufacturer with its popular routers and switches, Cisco has been facing a revenue decline and like other legacy firms has been focusing on other trending fields including big data, Internet of Things, and Internet Security.
Strategic Technological Fit For Cisco System Inc.
Cisco has been acquiring companies under the leadership of CEO Chuck Robbins. Robbins has a vision for moving away from the traditional networking manufacturing and moving towards the future with software-based services. This deal could come in as the second largest acquirement by Cisco after buying out the software company AppDynamics for $3.7 billion and a software startup Viptela Inc. for $610 million.
Based in Gaithersburg, Maryland by former CEO of Alcatel, BroadSoft was founded in 1998. Cisco has been acquiring the software companies in hopes of increasing the subscription-based revenues. Serving clients like Verizon, Broadsoft created software which they resold to their business consumers.
However, recently the company tried to revamp its business model to sell directly to consumers putting its relationship with clients like AT&T and Verizon Communications at risk.
Both BroadSoft and Cisco refused to comment. However, the deal is not finalized yet and the figures may change. For now, we’ll have all the facts as revealed by the secret source and we’ll have just that… with a grain of salt.
If the deal closes soon, Cisco will have an edge with a new route to diversify away from its traditional network equipment manufacturing and gain a foothold with collaboration and contact centers.