Cisco Systems Inc is planning to buy BroadSoft Inc, a software company which specializes in software used by major cable and telecommunications networks for $1.71 billion to boost Cisco’s collaboration tools. This deal will help in Cisco company’s diversity and its offerings.
BroadSoft’s shares increased to 1.35 percent after Cisco offered $55 per share for the company. This offer price is more than 25 percent which is more where BroadSoft shares were trading before said Reuters in a statement.
The purchase gives Cisco a stronger foothold in selling products to big telecom firms which can then provide integrated mobile, video, voice and other forms of electronic communications to their small and medium-size business customers.
Rob Salvagno, Cisco's vice president of corporate development, said in an interview that BroadSoft's products, which are delivered over the cloud, or the Internet, will improve Cisco's collaboration portfolio. Cisco's current products in that unit such as WebEx, are based on premise, which means they are installed on devices.
Daniel Ives, chief strategy officer at research firm GBH Insights said "This is a smart acquisition that gives Cisco more firepower to sell into its massive installed base over the coming years."
BroadSoft historically sold its products to huge telecommunication firms like Verizon Communications Inc and AT&T Inc, which will then resell these products to its business customers.