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Cisco to Buy Ubiquisys for $310 Million for Network Gear

Cisco Systems Inc. (CSCO) agreed to buy U.K. networking company Ubiquisys for about $310 million, gaining technology that helps wireless carriers provide better service to smartphone and tablet users.

The purchase is expected to close in the fourth quarter of Cisco’s 2013 fiscal year, the San Jose, California-based company said today in a statement. Ubiquisys employees will join Cisco’s service provider mobility business, reporting to Partho Mishra.

Cisco, the world’s largest maker of networking equipment, is using deals to add products that can help it get more business from wireless companies as soaring use of mobile devices boosts demand for tools to manage voice and data traffic. Ubiquisys provides what’s known as small-cell technology that can help carriers extend their coverage areas and increase network capacity during peak usage times.

“Small-cell technologies are one of the most cost- effective ways to add data capacity and will grow in importance as service providers address the explosion of mobile network traffic,” Brian Marshall, an analyst at ISI Group, wrote in a research report today. “The acquisition adds to the mobility capabilities Cisco has been building up.”

Ubiquisys was co-founded in 2004 by Will Franks, a former Lucent Technologies executive who wanted to create more reliable and affordable mobile coverage, according to the company’s website. Investors in the closely held company include Google Inc. (GOOG), Accel Partners, Advent Venture Partners and T-Mobile Venture Fund.

Photographer: David Paul Morris/Bloomberg

Cisco Systems Inc. is using deals to add products that can help it get more business from wireless companies as soaring use of mobile devices boosts demand for tools to manage voice and data traffic. Close

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Photographer: David Paul Morris/Bloomberg

Cisco Systems Inc. is using deals to add products that can help it get more business from wireless companies as soaring use of mobile devices boosts demand for tools to manage voice and data traffic.

Base Stations

In addition to small cell-technology -- tiny base stations used to create wireless hot spots for homes, businesses and public spaces -- Ubiquisys also gives Cisco software for managing 3G and long-term evolution, or LTE, wireless networks.

With the purchase, Cisco steps up competition with Alcatel Lucent and Ericsson AB, which sell small-cell technology in Europe, said Joanna Makris, an analyst at Mizuho Securities USA Inc. Ubiquisys would also help Cisco curb reliance on AT&T Inc. (T), its partner for providing base stations in the U.S.

Cisco agreed to buy Israel’s Intucell Ltd. for $475 million and San Francisco-based Meraki Inc. for $1.2 billion in recent months to gain technologies for managing wireless networks. In March of last year, Cisco agreed to buy NDS Group Ltd. for about $5 billion to tap demand for technologies that deliver and protect pay-TV content.

Cisco is also shedding units. In January, the company said that it sold its Linksys home-router unit for an undisclosed price, which followed earlier moves to exit consumer businesses such as the Flip video-camera unit.

Cisco’s shares slipped less than 1 percent to $21.20 at the close in New York. The stock has gained 7.9 percent this year, compared with an 8.9 percent increase for the Standard & Poor’s 500 Index.

To contact the reporters on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net; Jordan Robertson in San Francisco at jrobertson40@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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