Cisco and Starent Networks announced a definitive agreement for Cisco to acquire Starent Networks.
Starent Networks is a leading supplier of IP-based mobile infrastructure solutions targeting mobile and converged carriers. The Mobile Internet is at an inflection point as IP-enabled Smartphones 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 first half of calendar year 2010; however, the close date 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.
“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 Starent Networks President and Chief Executive Officer Ashraf Dahod.
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 Starent Networks’ President and Chief Executive Officer Ashraf Dahod, within Cisco’s Service Provider Business which is led by Pankaj Patel, Senior Vice President/General Manager.