Cisco Plans To Buy Acano For $700 Million

Cisco is all set to buy Acano  for $700 million

Cisco Systems Inc. has finally agreed to buy Acano Ltd. which was closely held by them for $700 million. This is the recent move by the Silicon Valley giant so that they can expand its video conferencing and collaboration business offerings.

Cisco is known in the tech world for its networking equipment and is considered to be a key player in the collaboration market. The acquisitions made in the past have given the company a strong portfolio. This encompasses the purchase of a Norway based video conferencing company in 2010 known as Tandberg ASA for $3.3 billion. Along with that, they have also signed a deal to buy WebEx Communication – a web meeting service for $3.2 billion.

According to the company, this month they have been successful in reporting a rise in revenue from the collaborations to 17% with a worth of $1.12 billion during the first trimester. The company recently estimated that about one in 10 of the conference rooms have video connectivity. So now the company has joined forces to modify the ratio where they wish to increase it to four from one in the coming ten years.

Acano on the other hand is a London based company that deals in hardware that can be installed by companies or cloud services to manage the video conferences. The thing that discriminates the service is the ability to connect the conference rooms via various hardware providers.

Rowan Trollope, the senior vice president and the general manger for the Cisco’s collaboration technology group stated, “Our big customers are telling us, ‘we want to do more with Cisco but it has to coexist with our legacy infrastructure.” He further added, “Acano is the bridge that makes everything work with everything else.”

Another benefit is that various companies now prefer to allow the external cloud computing service providers to regulate the video communications added Mr. Trollope. Cisco is one of those companies that is already offering this service. Thus, by joining hands with Acano, they can further enhance this experience.

The firm is already known for making acquisitions worth billions of dollars, thus now they have changed their strategy and prefer signing small deals along with forging the partnerships with big companies. The change in strategy can be governed via the latest initiatives taken by Cisco. It is now being estimated that the Acano transaction is likely to be completed by the quarter ending of Cisco on Apr. 30, 2016 as reported by the company.

Cisco stock was up 0.73% to $27.57 at market close on Friday.