KUHN CAPITAL Tuesday, March 20, 2018
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Cisco Doubles Down on VOIP

September 14

Cisco this week announced its agreement to buy privately-held dynamicsoft of Parsippany, N.J. The seller develops Session Initiation Protocol (SIP)solutions that allow telecom carriers to deliver Internet Protocol voice (VOIP), data and multimedia services.

With this acquisition, Cisco augments its broadband solutions portfolio, beefing up its wireless/wireline convergence solutions for "subscriber aware" networks.

Cisco will pay about $55 million in cash, a figure that includes the assumption of about $4 million in seller debt and working capital.

In another deal announced ealier this month, Cisco revealed its agreement to buy publicly-held and Austin-based NetSolve, (Nasdaq: NTSL) for $128 million. The company provides remote network and IT infrastructure management services, generating sales of about $46 million for the 12 months ending March 31 versus about $50 million for the prior year.

NetSolve's services allow Cisco customers to conduct real-time monitoring of Cisco products and better ensure continuous, secure VOIP operation.

Under the terms of that deal, Cisco will pay a fixed price of $11 per share of NetSolve stock, and convert outstanding NetSolve options to Cisco options at close. The price represents a 57% premiuim over NetSolve's $7 share price as of mid-August, and a sales multiple of 2.8x -- this for a company with declining revenues.

But no network equipment and software vendor can ignore the promise of VOIP today.

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