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M&A News: Cisco Systems, Inc. (CSCO) Buys BroadSoft Inc (BSFT)

Both stocks were surging higher Monday afternoon

Cisco Systems, Inc. (NASDAQ:CSCO) announced that it will be shelling out $1.71 billion for BroadSoft Inc (NASDAQ:BSFT).

Cisco Systems, Inc. (CSCO)The price is roughly $55 per share of BSFT stock, which is a 2% premium to last Friday’s closing share price. Additionally, the amount also marks more than a 25% premium on the price of BroadSoft shares before Reuters reported on Aug. 30 that the company was seeking a suitor to acquire it.

The move will help Cisco diversify its collaboration tools, namely in the business of selling products to big telecom firms. These companies will be able to buy solutions for integrated mobile, video, voice and other forms of electronic communications.

Cisco’s clients include small and medium-sized business customers, and it gives another dimension to the company’s dealings, which mostly consisted of switching and routing.

Rob Salvagno, Cisco’s vice president of corporate development, said during an interview that the BroadSoft acquisition will bring its products to his company, improving its collaboration portfolio. This includes products such as WebEx, which are installed on devices.

The total value of the deal is $1.9 billion including debt, and it is expected to be closed during the first quarter of 2018. The acquisition will see BroadSoft’s workers join Cisco’s communications technology group.

BroadSoft’s products include software and services that allow mobile, fixed-line and cable service providers to offer unified communications over their Internet protocol networks.

CSCO stock gained 1% Monday, while BSFT shares popped 1.5%.

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