By Nicola Leske
Nov 18 Networking equipment company Cisco
Systems Inc said it will buy privately held cloud
networking company Meraki for $1.2 billion in cash as part of
its cloud and networking strategy.
Cisco said the acquisition of Meraki, which was founded in
2006 by members of MIT's Laboratory for Computer Science, is
expected to close in the second quarter of Cisco's 2013 fiscal
year and is subject to regulatory approval.
Cisco's second quarter runs until the end of January.
Meraki - funded by Sequoia Capital and Google Inc -
offers Wi-Fi technology, switching, security and mobile device
management from the cloud with a focus on mid-sized businesses.
"This is a very logical move for Cisco," said ZK research
analyst Zeus Kerravala.
He said the deal will allow Cisco to offer alternative
solutions to traditional Wi-Fi deployment models like smaller
competitors, such as Aruba Networks and Ruckus Wireless
, which debuted on Friday.
"Cisco didn't really have anything to counter that before,"
Meraki's Chief Executive Sanjit Biswas said in a letter to
employees posted on the company website that Cisco had
approached the company several weeks ago.
The company's founders had at first rejected the offer in
favor of continuing Meraki's strategy aimed at an initial public
"After several weeks of consideration, we decided late last
week that joining Cisco was the right path for Meraki," Biswas
He also said that Meraki had achieved a $100 million
bookings run rate, grown to 330 employees and had a positive