Cisco Systems, Inc. (NASDAQ:CSCO?) issued a statement that they will be buying Starent Networks for $35 per share ($2.9 billion total). Starent Networks makes products that allow wireless telecommuncations to control large sums of data being sent to phones and computers.
The Starent deal was worth a 20% premium over the stock closing price on Monday. Starent customers include Verizon, Vodafone, China Telecom, and Sprint Nextel. ?We have had a huge explosion in data traffic,? stated Cisco chief strategy officer Ned Hooper. ?We expect the market for mobile data to double every year through 2013.? Cisco is also predicting that video data will be about 60% of the data traveling on mobile networks.
Cisco has been on an acquisition binge lately. Two weeks ago Cisco made an offer to buy out videoconferencing company Tandberg for $3 billion and Pure Digital Technologies (maker of Flip video cameras) for $590 million. Cisco has the most amount of cash on hand for acquisitions than any other technology company. Cisco has $35 billion.
Starent is based in Tewksbury, Massachusetts and was founded in 2000. Starent had a 74% revenue rise to about $254.1 million last year. The acquisition deal is expected to be completed by 2010 in the first half.