Cisco Systems Inc. said it plans to buy Acano Ltd., a closely held London-based company that provides conferencing software, for $700 million as it seeks to bulk up in a fast-growing area of revenue growth.
The purchase will help Cisco deliver more video services in a market where only 10 percent of conference rooms in the world are currently connected, the company said in a statement. San Jose, California-based Cisco aims to take advantage of a “massive market shift” towards connecting via video from anywhere, including mobile phones.
Cisco’s collaboration business, which includes the Webex conferencing service and video conferencing equipment is already seeing the results of that shift: the division grew 17 percent in the first quarter of the fiscal 2016 year, the company said.
The shares rose 0.7 percent to $27.57 at the close in New York bringing the loss so far this year to 0.9 percent. The Standard & Poor’s 500 Index has gained 1.5 percent.
Under the terms of the agreement, Cisco will pay $700 million in cash and assumed equity awards, plus additional retention-based incentives for Acano employees who join Cisco. The acquisition is expected to close in the third quarter of fiscal year 2016, the company said.
William Blair & Co. advised Acano on the transaction.