Cisco to buy BroadSoft in $1.9 billion deal

Cisco Systems Inc will buy U.S. telecommunications software company BroadSoft Inc in a deal valued at $1.9 billion, as the world`s largest networking gear producer shifts from its stagnating legacy business of switches and routers.

Cisco said on Monday it offered $55 per share, which represents a premium of 2 percent to BroadSoft`s last close.

BroadSoft shares were up 1.5 percent before the bell, while Cisco shares were up marginally.

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The deal, which comes after Reuters reported on Sunday that the companies were in talks, will give Cisco a stronger foothold in selling unified communications software to big telecommunications firms.

The equity value of the deal is $1.71 billion, based on 31 million shares outstanding, according to Thomson Reuters data.

The deal is expected to close during the first quarter of 2018, the companies said in a statement.

Upon completion of the deal, BroadSoft employees will join Cisco`s unified communications technology group.

BroadSoft provides software and services that enable mobile, fixed-line and cable service providers to offer unified communications over their internet protocol networks.

Cisco, like other legacy technology firms, has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.

BroadSoft has historically sold its products to large telecommunications companies such as Verizon Communications Inc and AT&T Inc, which then resell the software to their business customers.

The BroadSoft deal is the company`s second major acquisition this year following the $3.7 billion acquisition of privately-held AppDynamics Inc in March.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)