Cisco buying Israel's Leaba Semiconductor for $320 million

The Cisco Systems logo is seen as part of a display at the Microsoft Ignite technology conference in Chicago, Illinois, May 4, 2015. REUTERS/Jim Young

TEL AVIV (Reuters) - Cisco Systems CSCO.O said on Wednesday it plans to acquire Israel's Leaba Semiconductor, a designer of networking chips, for $320 million in cash plus additional incentives to retain employees.

“Leaba is a team with a strong and successful track record of designing leading edge networking semiconductors that provide innovative solutions to address significant infrastructure challenges,” Cisco said in a blog on its website.

Little is known about Leaba, which has raised $16 million since it was founded in 2014 by its chief executive Eyal Dagan and its chief technology officer Ofer Iny, who sold Dune Networks to Broadcom in 2009 for about $200 million.

Investors in Leaba, which has 45 employees and is based in the coastal town of Caesarea, include Pitango Venture Capital of Israel and Bessemer Venture Partners.

“By combining Leaba’s semiconductor expertise with the Cisco engineering team, we will accelerate our plans for Cisco’s next generation product portfolio and bring new capabilities to the market faster,” Cisco said.

A source familiar with Leaba noted the company was very young and without a fully developed product. This is “an acquisition of a talented team working on something of strategic interest to Cisco,” said the source, who asked not to be named.

Reporting by Tova Cohen; Editing by Steven Scheer