Cisco yesterday announced it is buying mobile packet core specialist Starent Networks for US$2.9 billion (US$35 per share). The price represents a premium of 21 percent over Monday’s closing share price. Founded in 2000, Starent completed an IPO in 2007 and reported revenue of US$254.1 million last year, a 74 percent improvement on the year prior, and net income of US$60.5 million. Earlier this year Starent scored a major win with US operator Verizon Wireless for deployment of LTE networks. Cisco expects the Starent deal to close in the first half of calendar year 2010. Upon completion, Starent will become the new Mobile Internet Technology Group led by Starent’s president and CEO, Ashraf Dahod, within Cisco’s Service Provider Business which is led by Pankaj Patel.
The move comes only days after Cisco announced the US$3 billion acquisition of Norwegian video conferencing specialist Tandberg. At the time, Cisco chief executive John Chambers said the firm would be “more aggressive” over the next 12 months in pursuing other acquisitions.