Cisco to buy cloud-networking start-up Meraki for $1.2 billion
By Nicola Leske
(Reuters) - Networking equipment company Cisco Systems Inc said it will buy privately held cloud networking company Meraki for $1.2 billion in cash as part of its cloud and networking strategy.
Cisco said the acquisition of Meraki, which was founded in 2006 by members of MIT's Laboratory for Computer Science, is expected to close in the second quarter of Cisco's 2013 fiscal year and is subject to regulatory approval.
Cisco's second quarter runs until the end of January.
Meraki - funded by Sequoia Capital and Google Inc - offers Wi-Fi technology, switching, security and mobile device management from the cloud with a focus on mid-sized businesses.
"This is a very logical move for Cisco," said ZK research analyst Zeus Kerravala.
He said the deal will allow Cisco to offer alternative solutions to traditional Wi-Fi deployment models like smaller competitors, such as Aruba Networks and Ruckus Wireless, which debuted on Friday.
"Cisco didn't really have anything to counter that before," Kerravala noted.
Meraki's Chief Executive Sanjit Biswas said in a letter to employees posted on the company website that Cisco had approached the company several weeks ago. Continued...