The Cisco logo is displayed at the technology company's campus in San Jose, California February 3, 2010. - Reuters (File Photo)

Sun Nov 18, 2012 - 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.

The company's founders had at first rejected the offer in favor of continuing Meraki's strategy aimed at an initial public listing.

"After several weeks of consideration, we decided late last week that joining Cisco was the right path for Meraki," Biswas said.

He also said that Meraki had achieved a $100 million bookings run rate, grown to 330 employees and had a positive cash flow.

Updated Nov 19, 2012 09:44am

Comments (2) (Closed)


Sandip
Nov 23, 2012 02:07pm
And new millionares are being born
Cherian (Melbourne)
Nov 19, 2012 11:33am
Is Cisco really serious about cloud computing or is this just another accquisition merely for market prescence? Reminds me about Cisco's half hearted foray into the fields of security and load balancing.