Linksys buyer named

Belkin International to acquire Cisco’s flagging home network unit

Tags: Belkin International IncorporationCisco-LinksysMergers and acquisitions
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Linksys buyer named Belkin expects the deal to bolster its position in the home networking market.
By  Stephen McBride Published  January 29, 2013

California-based Belkin International Inc has announced that it agreed to acquire Cisco's loss-making Home Networking Business Unit, including products, technology and personnel.

The deal will include the Linksys brand for which Belkin will maintain product support and the company pledged to honour all valid warranties for current and future Linksys products.

"After the transaction closes, Belkin will account for approximately 30% of the US retail home and small business networking market," Belkin said in a statement.

In mid December Bloomberg reported that Cisco had retained Barclays to facilitate the sale of the unit, which had seen a 35% decline in revenues over a two-year period. At the time, Bloomberg named Belkin as a possible interested party along with Western Digital Corp (WDC).

"We're very excited about this announcement," said Chet Pipkin, CEO of Belkin. "Our two organizations share many core beliefs - we have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture. Belkin's ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision... Linksys will enhance Belkin's capabilities to meet the needs of the service provider space and small business users."

The transaction is subject to various standard closing conditions and is expected to be completed in March 2013. Although Belkin's announcement did not include any disclosure of financial terms, when Cisco first announced the search for a buyer people familiar with the process said they expected the sale would be for a considerably more modest figure than the $500m Cisco paid for Linksys in 2003. This was due to the relative business maturity of the division and the low margins associated with its products.

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