Cisco to Acquire Duo Security for $2.35 Billion, Adding Services
Cisco Systems Inc., the biggest provider of the machinery that forms the backbone of the internet, said it plans to buy Duo Security for $2.35 billion, adding to its offerings in cloud-based security.
Cisco is paying in cash and assumed equity for the private company, which provides technology that checks identities and the trustworthiness of the devices being used to access applications. The transaction is expected to close in Cisco’s fiscal first quarter, which begins in October, the California-based company said in a statement Thursday.
Chief Executive Officer Chuck Robbins has embarked on a spree of acquisitions in recent years, responding to changes sweeping through the networking industry that have threatened growth in Cisco’s main equipment business. As customers shift purchases toward software and services, he’s bulked up in businesses like network security and programs that manage connected gadgets. The moves are aimed at easing Cisco’s dependence on expensive, locked-down hardware and this one adds another layer to the company’s security offerings.
Duo’s products are provided via software-as-a-service. They’re designed to both make it harder to gain illicit access to data and easier to manage and grant right-of-use of a network.
Robbins broke a seven-quarter run of sales declines earlier this year, and Cisco is on course to grow 3 percent in fiscal 2018, based on the average of analysts’ estimates. While that’s far short of the kind of growth spurt that made Cisco the world’s largest publicly traded company in the late 1990s, it has rekindled investor interest in the company. The stock was up 9.3 percent this year through Wednesday’s close.