Merger News: Cisco’s New Star – Starent
Puns aside, for all of you technology fans, among the flurry of recent technology consolidation activity comes another multi-billion dollar deal: Cisco has agreed to purchase Starent, a company that makes infrastructure equipment used by cell phone companies to offer enhanced voice and data services including video messaging and the internet, for $2.9 billion or $35 per share (a 21% premium over the previous closing price).
The deal is expected to close by Q2 of 2010 and Cisco expects the transaction to realize a profit within 2 years of acquisition. Once complete, the former Starent will become the Mobile Internet Technology group within Cisco’s “service-provider business,”and will be led by Starent’s CEO, Ashraf Dahod. It’s not the biggest or the most exciting technology merger, but it clearly shows that Cisco meant it when it said that it would become more aggressive towards acquisition opportunities during the economic downturn.
