2 May 2002 Networking hardware giant Cisco has announced two acquisitions – the first in almost a year for the traditionally acquisitive company.
Cisco has agreed to pay a total of $258 million (€285.4m) for two privately held companies – Billerica, Massachusetts-based Hammerhead Networks, for $173 million (€191.4m) in stock; and Plano, Texas-based Navarro Networks for $85 million (€94m) in stock.
Cisco already owned a minority share in Hammerhead, which develops Internet protocol billing and security software, and is buying up the shares it does not already own in the company. Navarro makes networking components designed to improve communication between computers using the Ethernet networking.
Cisco CEO John Chambers says that the company plans between eight and 12 acquisitions this year. This marks a return to Cisco’s earlier strategy of buying up smaller companies with innovative networking technologies it could use to broaden its product portfolio. In 2000, for example, Cisco spent $12 billion (€13.27bn) on 23 acquisitions. As the economy slowed, so did Cisco’s acquisition strategy.
Further acquisitions may also be in the pipeline, according to a filing Cisco made with the US Securities and Exchange Commission in March 2002. In the filing, Cisco declared that it planned to set aside more than $60 million (€66.4m) to cover the acquisition of four companies before the end of September 2002.