Cisco pays US$1.9b to acquire BroadSoft

Cisco Systems Inc will buy US telecommunications software company BroadSoft Inc in a deal valued at US$1.9 billion, as the world’s largest networking gear producer shifts from its stagnating legacy business of switches and routers.

Cisco said yesterday it offered US$55 per share, which represents a premium of 2 percent to BroadSoft’s last close.

The deal, which comes after Reuters reported on Sunday that the companies were in talks, will give Cisco a stronger foothold in selling unified communications software to big telecommunications firms.

The equity value of the deal is US$1.71 billion, based on 31 million shares outstanding, according to Thomson Reuters data.

The deal is expected to close during the first quarter of 2018, the companies said in a statement.

Upon completion of the deal, BroadSoft employees will join Cisco’s unified communications technology group.

BroadSoft provides software and services that enable mobile, fixed-line and cable service providers to offer unified communications over their Internet protocol networks.

Cisco, like other legacy technology firms, has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.

BroadSoft has historically sold its products to large telecommunications companies such as Verizon Communications Inc and AT&T Inc, which then resell the software to their business customers.