Cisco Systems completes the acquisition of Leaba Semiconductor followed by an acquisition of CliQr a couple of days ago
Cisco Systems, Inc. made an acquisition of CliQr Technologies a couple of days ago in a deal valued at $260 million. The Wall Street Journal announced a deal today worth $320 million to buy out an Israeli Networking Chipmaker Leaba Semiconductor. It is believed that the networking giant is upping its game on acquisitions and mergers domain. Hence, it made two quick acquisitions in just a matter of couple of days. The deal is made as Cisco wants to boost vertical integration in its business. On top of that, Leaba also manufactures and develops networking chips.
Cisco Systems is very open minded and has always appreciated others when it comes to developing chips. It considers letting external producers work on developing chips as well as its in house technology which has been now working for a long time in this industry. Cisco is one of the biggest name in networking chips, equipment, and security. Recently, it is touching new heights by expanding its business in the Internet of Things (IoT) sector along with developing ‘smart’ things.
This deal suggests that the networking giant will leverage on Leaba’s technology as a part of reducing its dependence and reliance on external producers for developing chips. Moreover, it wants to achieve synergies with regards to its own chip making plant.
The Vice President of Corporate Development at Cisco, Rob Salvagno, said in a blog post, “By combining Leaba’s semiconductor expertise with the Cisco engineering team, we will accelerate our plans for Cisco’s next generation product portfolio and bring new capabilities to the market faster.”
The co founder of the newly acquired chip developer, Eyal Dagan, is also known for founding another fabless chip company which was called Dune. Dune was founded almost a decade ago and had the potential to become a big company. It was later approached and acquired by Broadcom for nearly $178 million in 2009. Dune’s business model was same as Leaba as it used to develop networking chips for not only data centers but for Ethernet switching platforms as well.
Cisco’s other acquisition, CliQr Technologies, deals in developing computer based solutions servers for its clients. Its services allow organizations and enterprises to manage and keep a track on their data internally and externally on CliQr’s cloud servers. And two deals in quick succession shows that it is out on a buying spree but not only just on a spree, it is working to improve its market position with these deals.