Cisco to Buy Collaboration Company Acano for $700 Million -- Update

By Don Clark And Lisa Beilfuss 

Cisco Systems Inc. agreed to buy closely held Acano Ltd. for $700 million in cash, the latest move by the Silicon Valley giant to expand its videoconferencing and other collaboration businesses.

Cisco, though best known for networking equipment, was already a major player in the collaboration market. Prior acquisitions gave it a formidable portfolio, including the 2010 purchase of the Norwegian videoconferencing company Tandberg ASA for $3.3 billion and a 2007 deal to buy Web meeting service WebEx Communications for $3.2 billion.

The San Jose, Calif., company this month reported that revenue from collaboration products rose 17% to $1.12 billion in its first fiscal quarter.

Cisco estimated Friday that only one in 10 corporate conference rooms are connected with video, vowing to change the ratio to one in four over the next decade.

Acano, based in London, specializes in hardware that companies or cloud services install to manage videoconferences. One of its key selling points is the ability to connect conference room systems from different hardware providers.

"Our big customers are telling us, 'we want to do more with Cisco but it has to coexist with our legacy infrastructure,'" said Rowan Trollope, a senior vice president who is general manager of Cisco's collaboration technology group. "Acano is the bridge that makes everything work with everything else."

Another draw is the preference of many companies to let external cloud providers manage any video communications, Mr. Trollope said. Cisco already offers such services, which Acano's technology could enhance, he said.

The company, known for many billion-dollar acquisitions, has lately expressed a preference for smaller deals while forging partnerships with large companies. Cisco, for example, this month announced a broad collaboration with the Swedish telecommunications equipment company Ericsson AB.

Last month, Cisco struck a deal to buy security specialist Lancope Inc. for about $453 million. In June Cisco announced a $635 million deal to buy OpenDNS, which maintains a network of domain-name servers to help route Web traffic and can use that technology to help block attacks carried out over the Internet.

The Acanos transaction is expected to be completed in Cisco's quarter ending April 30, Cisco said.

Write to Don Clark at [e-mail] and Lisa Beilfuss at [e-mail]

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(END) Dow Jones Newswires

November 20, 2015 14:59 ET (19:59 GMT)

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