Cisco Agrees To Buy Israeli Intucel Limited for $475 Million-T

Northern, WI 1/25/2013 (avauncer) –Intucell Ltd. is all set to be bought out by Cisco Systems Inc. (NASDAQ:CSCO) which is the world’s largest network equipment manufacturer. The deal is supposed to be valued at $475 million. Cisco Systems Inc. (NASDAQ:CSCO) stands to gain cutting-edge technology that would help wireless carriers successfully manage their networks.

The Israel-based close-held company will receive the remuneration partly in cash and partly in retention incentives. The deal is expected to be finalized by April end which is Cisco Systems Inc. (NASDAQ:CSCO)’s fiscal third quarter.

Since wireless carriers are increasing their spending to manage more traffic, the acquisition makes much more sense as it is a concerted effort to garner more and more revenue. The glut of Smartphones, tablets and other handheld devices have created traffic jams on networks hence the demand for fine-tuning the functioning of the networks becomes imperative.

Cisco Systems Inc. (NASDAQ:CSCO) is making a smart move by adding tried and tested technology via an acquisition. AT&T inc. (NYSE:T) utilize Intucell’s technology to manage their network and enhance the quality of consumer experience. Technology developed by Intucell works in such a way that an overloaded cell tower passes on traffic to nearby towers to relieve its congestion.

After failing to expand its presence into the consumer product market, Cisco Systems Inc. (NASDAQ:CSCO) is hunting for new avenues for growth. Slowdown in sales in the past 2 years has forced Cisco Systems Inc. (NASDAQ:CSCO) to cut down thousands of jobs and close down businesses like the Flip video-camera unit.

After the acquisition, employees of Intucell will be absorbed by Cisco Systems Inc. (NASDAQ:CSCO)’s Service Provider Mobility Group.

A Cisco Systems Inc. (NASDAQ:CSCO) senior VP, Kelly Ahuja said that futuristic mobile networks have to be developed to handle increasing and erratic traffic patterns while keeping an eye on increasing revenues too. All in all the Cisco Systems Inc. (NASDAQ:CSCO) shares have moved upwards by 8.7% during 2012 as compared to the year before that.

The shares of Cisco Systems Inc. (NASDAQ:CSCO) were up by 1.94% to $21.02. The shares of AT&T inc. (NYSE:T) were down by 0.09% to close at $33.75.