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Cisco buys Starent Networks for $2.9B

Posted: 21 Oct 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Cisco Starent acquisition? mobile Internet? network?

Cisco has signed a definitive agreement to IP-based mobile infrastructure solutions supplier Starent Networks. The mobile Internet is at an inflection point as IP-enabled smart phones and other connected mobile devices gain rapid acceptance. Service providers have been actively investing in this market as global mobile data traffic is expected to more than double every year through 2013, according to the Cisco Visual Networking Index.

Under the terms of the agreement, Cisco will pay $35 per share in cash in exchange for each share of Starent Networks and assume outstanding equity awards for an aggregate purchase price of approximately $2.9 billion. The acquisition has been approved by the boards of directors of both companies.

The acquisition is expected to close during the 1H 10. The close date, however, is subject to customary closing conditions and regulatory reviews. Cisco expects the acquisition to be dilutive to non-GAAP earnings in fiscal years 2010 and 2011 and accretive to non-GAAP earnings in fiscal year 2012.

"We are very pleased that Starent Networks will be joining the Cisco team, and we believe their products and engineering talent will greatly benefit our service provider customers as they build out their Mobile Internet offerings," said John Chambers, chairman and CEO, Cisco.

"Cisco and Starent Networks share a common vision and bring complementary technologies designed to accelerate the transition to the mobile Internet, where the network is the platform for service providers to launch, deliver and monetize the next generation of mobile multimedia applications and services," said Pankaj Patel, senior VP and general manager, service provider business.

"Combining Cisco's strength in Video and IP with Starent Networks' leading mobile infrastructure solutions, creates a compelling portfolio of products that provides an integrated architecture to offer rich, quality multimedia experiences to mobile subscribers on 3G and 4G networks," said Ashraf Dahod, president and CEO of Starent Networks.

Starent Networks' mobile infrastructure solutions play an important role in enabling Service Providers to scale their mobile infrastructure and monetize their investments via differentiated experiences. The company provides the multimedia intelligence, core network functions and services to manage access from any 2.5G, 3G, and 4G radio network to a mobile operator's packet core network. Starent Networks' access-independent technology is deployed in CDMA2000 (1X, EV-DO), UMTS/HSPA and WiMAX networks.

Prior to the close, Cisco and Starent Networks will continue to operate as separate companies. Upon completion of the transaction, Starent Networks will become the new Mobile Internet Technology Group led by Dahod, within Cisco's Service Provider Business which is led by Patel.

Starent Networks was founded in 2000 and completed its initial public offering in 2007. The company is based in Tewksbury, Massachusetts and has approximately 1,000 employees worldwide. For the year ended Dec. 31, 2008, Starent Networks reported revenue of $254.1 million, up 74 percent from the prior year.





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