Cisco Systems said it will pay $35 per share, or $2.9 billion, to acquire Starent Networks, giving it a stronger hold in the data trafficking sector ahead of what the company views as massive growth in mobile data. The deal represents nearly a 20 percent premium on Starent's closing price on Monday of $29.03 per share.
The announcement comes less than two weeks after Cisco said it would buy Tandberg, the video conferencing equipment manufacturer, for $3 billion.
Cisco's acquisition of Starent will give Cisco a greater ability to help wireless carriers manage data traffic, according to Ned Hooper, Cisco's chief strategy officer. "We have had a huge explosion in data traffic," Hooper told the New York Times. "We expect the market for mobile data to double every year through 2013."
Since Starent started in 2000, the company has picked up a handful of major customers, including Verizon Wireless, Sprint Nextel, Vodafone and Cox Communications. The company went public in 2007. In February, Verizon announced that Starent--along with Alcatel-Lucent and Ericsson--would be providing the enhanced packet core for its LTE network. Both Cisco and Starent have also supported WiMAX as well.
Starent reported 2008 revenue of $254.1 million, up 74 percent from a year earlier.
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