Cisco Systems, Inc. (NASDAQ:CSCO) Announced on Tuesday that it entered a $635 Million deal to acquire a web security company called OpenDNS.
The web security firm was formed in 2006 and operates a series of domain name servers that it uses to reroute internet traffic. The company competes with servers from telecommunication carriers and internet service providers. Companies and individuals use OpenDNS to gain access to websites at a much faster pace. The company currently hosts 65 million users and has 25 data centers in operation.
OpenDNS hosts major companies including NVIDIA Corporation (NASDAQ:NVDA), Netflix, Inc.(NASDAQ:NFLX), BP, and a few others. After the acquisition, David Ulevitch, the current CEO will step down from the company. Mr. Ulevitch founded the company immediately after finishing college. Greylock, Sequoia Capital, Chris Sacca and Sutter Hill Ventures are among the investors who contributed to the three rounds that raised $51 million for the startup. The company has been registering positive performance since 2007.
The deal is also the first high potential acquisition for Cisco since the announcement that Chuck Robbins will be the company’s new Chief Executive. Cisco is best known for manufacturing equipment used for facilitating the transition of internet data and communications. The company also deals with security software and services.
Cisco has been very active over the past few years. The company has been carrying out intensive investments to diversify and strengthen its business. In 2014, Cisco bought out a cyber-security company called Source fire for $2.7 billion. It also acquired another company called Threat Grid Inc. that deals with malware detection. Cisco’s security ventures accounted for 4.3% of the company’s revenue in 2014.
David Goeckeler, Cisco’s senior vice president for the company’s security ventures pointed out that the new acquisition is strategic because the internet traffic monitored by OpenDNS will refine Cisco’s threat detection as well as its response to security threats.
The acquisition transactions are expected to come to a close in the first quarter of 2016.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.