The biggest networking gear manufacturer of the world, Cisco Systems Inc., is nearing a contract to obtain BroadSoft Inc., the U.S. telecommunications software company, for almost $2 Billion, a source known with the issue claimed to the media in an interview last week. The contract, which comes when media initially reported in August that BroadSoft was hunting for a sale, might permit Cisco to additionally diversify away from its declining routers and switches business by offering it a sturdier foothold in trading software of unified communications to huge telecom companies.
If contract negotiations are concluded productively, agreement of Cisco to obtain BroadSoft might be declared as early as next week, the source claimed, asking not to be named since the discussions of the deal are confidential. Cisco refused to answer. BroadSoft did not instantly gave an answer for comment. Bloomberg News earlier last week reported that Cisco was near to a contract to obtain BroadSoft. With its customary business of making routers and switches witnessing income declines, Cisco, similar to other legacy tech companies, has been aiming on high-development segments such as the Internet of Things, security, and cloud computing.
The BroadSoft contract might be 2nd major acquisition of Cisco this year after the $3.7 Billion acquirement in March of privately controlled AppDynamics Inc. Shares of BroadSoft had concluded at $54.90 last week, giving the firm a market value of $1.67 Billion. Located in Gaithersburg, Maryland, BroadSoft offers services and software that allow fixed-line, mobile, and cable service operators over their internet protocol networks to provided unified communications.
BroadSoft has in the past traded its goods to bug telecom companies such as AT&T Inc. and Verizon Communications Inc., which then resell the software to their trade users. BroadSoft has lately made an attempt to increase its business model to trade directly to these users, a decision that dangers its relations with its telecom partners, as per a research report from Barclays Plc.
P2 Capital Partners LLC, New York-located hedge fund, possessed a 4.6% share in BroadSoft as of the June-end, as per the media data and the industry sources mentioned above.