According to the sources if deal negotiations are successfully completed, Cisco will announce the agreement of buying BroadSoft as early as Monday. Until the acquisition closes next year, Cisco and BroadSoft will continue to operate as separate organizations.
Gaithersburg, Maryland-based BroadSoft provides telecommunications technology for businesses, including phone services, audio and video conferencing and virtual meetings.
Rob Salvagno, Cisco's vice president of corporate development, said in an interview that BroadSoft's products, which are delivered over the cloud, or the Internet, will improve Cisco's collaboration portfolio. Its flagship products include BroadWorks, an application platform hosted on-premises by service providers, and BroadCloud, its cloud-based platform for service providers "looking for an accelerated time-to-market with business ready services".
The deal is expected to be wrapped up by the first quarter to 2018, after which Broadsoft employees will be joining Cisco's communications technology division.
It also offers software enabling customers to offer unified communications-as-a-service (UcaaS), either from their own platform or from Broadsoft's own BroadCloud software-as-a-service or platform-as-a-service delivery platforms.
The primary aim of the acquisition is to boost Cisco's portfolio of collaboration tools, and further diversify away from the company's core switch and router hardware offerings. Meanwhile, Cisco has been placing all its attention on high-growth sectors like cloud computing, the Internet of Things and security.
The BroadSoft deal is Cisco's second major acquisition this year following a $3.7 billion deal for privately held AppDynamics Inc in March.
Broadsoft has over 500 customers globally, but among those customers are communication providers such as AT&T or Verizon, who then resell Broadsoft's service to millions and millions to their customers worldwide.
BroadSoft was advised on the transaction by Jefferies Group and Qatalyst Partners, with legal advice from Cooley LLP.
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