Cisco to buy Starent for $2.9 bn

NEW YORK: Cisco announced on Tuesday it has agreed to buy wireless equipment maker Starent Networks for 2.9 billion dollars, the latest in a string of acquisitions by the US networking giant.

The San Jose, California-based Cisco said it will pay 35 dollars in cash for each share of the Tewksbury, Massachusetts-based company, a premium of around 20 percent over Starent's closing price on Monday.

Cisco said the deal, which has been approved by the boards of directors of both companies, was expected to close in the first half of 2010 and is subject to regulatory approval.

Starent makes networking equipment that allows mobile operators to transmit large amounts of data to smartphones and other connected devices.

According to Cisco, global mobile data traffic is expected to more than double every year through 2013.

"We believe their products and engineering talent will greatly benefit our service provider customers as they build out their mobile Internet offerings," said Cisco chairman and chief executive John Chambers.

Starent president and chief executive Ashraf Dahod said the combined companies will offer "rich, quality multimedia experiences to mobile subscribers on 3G and 4G networks."

Starent was founded in 2000 and has about 1,000 employees worldwide. It reported revenue of 254 million dollars last year, up 74 percent from the previous year.

Its products are used by more than 100 mobile operators in 45 countries.

The acquisition of Starent is the latest major purchase in what has been a busy year for Cisco.

Earlier this month, Cisco bid three billion dollars for Norwegian video-conference company Tandberg.

In March, Cisco bought Pure Digital Technologies, maker of the hot-selling Flip Video camcorder, and it purchased Tidal Software Inc. the following month.