Original URL: http://www.theregister.co.uk/2009/04/06/cisco_acquisitions/
Cisco takes comfort in misery of others
Firesale buying spree is on
Posted in Data Networking, 6th April 2009 17:38 GMT
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Cisco Systems is to go on a shopping spree, accelerating its company-acquisition efforts at a time when the Meltdown has depressed equity values worldwide.
Tech companies are a bargain these days. IBM, meanwhile, is unhappy that the Cisco networking giant has turned its attention to server blades - witness IBM's interest in buying Sun Microsystems.
With good deals to be had and the need for some tough talking against IBM, Bloomberg has quoted (http://bloomberg.com/apps/news?pid=20601110&sid=agcl9EzU125o) Cisco's senior vice president of corporate development and the company's consumer group, Ned Hooper (http://newsroom.cisco.com/dlls/execs/hooper-ned.html), as saying about Cisco's acquisitions efforts: "We will be active - not hope to be - will be."
And with $29.5bn (£20bn) in cash, Cisco is well-positioned in this buyer's market. Armed with that kind of ready money and with company values being cheap, it's a good time for the company to go shopping.
As Hooper put it: "The downturn for us is a big positive."
It remains to be seen, however, how the company will spend its cash. Will it buy up support systems for its new "California (http://www.theregister.co.uk/2009/03/24/cisco_california_economics/)" Unified Computer System line? Maybe shore up its consumer-level brand recognition, as it appears was one goal of its recent purchase of that YouTuber's delight, Pure Digital (http://www.theflip.com/products_flip_ultra.shtml?gclid=COf5mYXY3JkCFRIcawodllDGVg)'s camcorder-for-the-masses, the Flip (http://www.reghardware.co.uk/2009/04/06/review_camcorder_flip_mino_hd/)?
Or possibly it will simply continue to build its IT-infrastructure offerings, like it did with its January acquisition of Richards-Zeta Building Intelligence (http://newsroom.cisco.com/dlls/2009/corp_012709.html), an energy-monitoring middleware developer.
We do know of a rather large and reasonably affordable California-based systems company that happens to compete with IBM and is going (http://www.theregister.co.uk/2009/04/06/ibm_sun_breakdown_followup/) for around $8.50 a share - if you can win over its former chief executive that is.
Stay tuned. A corporate wallet stuffed with $29.5bn can buy a lot of struggling companies. Along with a lot of business-press headlines.®