Cisco Systems, Inc. (NASDAQ:CSCO) announced its intent to acquire Acano Limited, a privately held company based in London that provides collaboration infrastructure and conferencing software. Acano’s hardware and software includes gateways, and video and audio bridging technology that allows customers to connect video systems from multiple vendors across both cloud and hybrid environments. This acquisition will accelerateCisco’s collaboration strategy to deliver video everywhere, providing the best collaboration experience across every endpoint, every screen, every workspace, and to every user.
Today, less than 10 percent of the conference rooms in the world are connected via video. However, there is a massive market shift underway in collaboration — customers want the ability to easily connect from anywhere, from dedicated hardware endpoints to sharing video on a mobile phone. Cisco’s collaboration business is already seeing the impact of this trend, with 17 percent year-over-year growth in the first quarter of fiscal year 2016. As the momentum continues, there is a need to deliver solutions that will connect any system, regardless of vendor, at a scale that is dramatically higher than ever before. Acano’s technology and expertise will enable us to accelerate our development in the key areas of interoperability and scalability.
- Interoperability: In this rapidly growing industry, customers expect any new collaboration solution to work with their existing technology. Acano shares Cisco’s commitment to interoperability; they have focused on developing products that connect a wide variety of endpoints and systems from all the major collaboration vendors. Their technology further enhances Cisco’s ability to deliver video from the cloud to any screen. This includes enhanced support for Microsoft’s proprietary protocols and mobile browsers through WebRTC support.
- Scalability: As collaboration adoption grows, so does the need for infrastructure models that can support a higher capacity of users and systems than customers have ever required before. This is important in both cloud-based environments and hybrid environments where customers have a mix of cloud and on premises solutions. Acano has solved several key challenges in delivering collaboration at dramatically increased scale — with both dedicated hardware appliances and virtualized software options that allow customers to connect tens of thousands of users and meeting rooms without compromising on the audio and video experience.
With Acano, we believe we can accelerate our collaboration momentum and bring new capabilities to market faster. Together, Cisco and Acano will be able to capture the expanding market opportunity in collaboration and deliver open and interoperable solutions whether in the cloud or via a hybrid model.
“People, companies and organizations are more geographically dispersed than ever before, and collaboration is essential to helping teams increase productivity and drive growth,” said Rob Salvagno, vice president, Cisco Corporate Development. “Acano’s innovations make it easier for customers to collaborate when, where and how they want. Together, we will help our customers to extend collaboration to every room, every screen and every user.”
The Acano team will join the Cisco Collaboration Technology Group led by Rowan Trollope, senior vice president and general manager. Under the terms of the agreement, Cisco will pay $700 million in cash and assumed equity awards, plus additional retention based incentives for Acano employees who join Cisco. The acquisition is expected to close in the third quarter of fiscal year 2016, subject to customary closing conditions including regulatory review.(Original Source)
Shares of Cisco closed yesterday at $27.37. CSCO has a 1-year high of $30.31 and a 1-year low of $23.03. The stock’s 50-day moving average is $27.96 and its 200-day moving average is $27.57.
On the ratings front, Cisco has been the subject of a number of recent research reports. In a report issued on November 16, William Blair analyst Jason Ader reiterated a Buy rating on CSCO. Separately, on November 13, Raymond James’ Simon Leopold reiterated a Buy rating on the stock and has a price target of $33.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Ader and Simon Leopold have a total average return of 4.7% and 3.4% respectively. Ader has a success rate of 50.7% and is ranked #1049 out of 3857 analysts, while Leopold has a success rate of 59.2% and is ranked #1217.
Overall, 2 research analysts have rated the stock with a Sell rating, 3 research analysts have assigned a Hold rating and 11 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $29.17 which is 6.6% above where the stock closed yesterday.