On Monday, the Cisco System Inc. said it will buy the U.S. telecommunications software company BroadSoft for $1.71 billion in a deal for boosting the Cisco’s collaboration tool to help the company for diversifying its offerings away from routing and switching. But today finally it agreed to but the BroadSoft Inc. for $1.9 billion for further expansion of software and cloud services.
BroadSoft’s shares that specialize in software used by telecommunications and major cable networks, increased to 1.35% after Cisco had offered the company $55 per share, giving a premium of 2 percent to the shareholders to the closing share price of last Friday.
The offer price is more than 25 percent higher than the shares that BroadSoft were trading before the reports of Reuters on 30th August that the company was traversing a potential sale. This purchase gives Cisco a stronger bridgehead in selling items to bigger tech firms that can then provide added video, mobile, voice and all other forms of electronic communications to their medium t small sized business customers.
The share of Cisco also rose by 1 percent.
In an interview, the Vice President of Cisco’s corporate development, Rob Salvagno said that the products of BroadSoft that are delivered over the cloud, or through the Internet, will enhance the collaboration portfolio of Cisco. The latest products of Cisco in that unit like; WebEx are based on the premise that means they are installed on the devices.
The chief strategy officer at the research firm of GBH Insights, Daniel Ives said; “This is a smart acquisition that gives Cisco more firepower to sell into its massive installed base over the coming years”.
The deal that valued that $1.9 billion includes debt, which is expected to shut down during the first quarter of next year that’s 2018, that was said in a statement by the company.
Once the deal is complete the employees of BroadSoft will join the unified communications technology group of Cisco. Unlike other huge technology companies, Cisco has been focusing on the areas of high-growth such as; the Internet of things, security and cloud computing. Salvagno also added that BroadSoft and Cisco shares a lot of customers among them.