Contact: Scott Denne
Cisco ends a brief respite from substantial acquisitions by purchasing Tail-f Systems for $175m. The networking giant hasn’t paid more than $100m for a business in almost 10 months, marking its longest break between $100m deals since 2010-11, when no purchases crossed that mark.
The recent slowdown in Cisco’s dealmaking (this is only its second acquisition of the year) comes amid declining sales. After three years of growth, the company’s revenue dropped below year-ago levels in each of the last two quarters.
With the pickup of network orchestration vendor Tail-f, Cisco aims to bolster its service-provider business, a segment where orders declined 13% in the first quarter of its current fiscal year, 12% in the second, and 5% in the most recent quarter. Cisco expects it will take multiple quarters to return to growth in that segment.
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