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Computer networking equipment maker Cisco Systems will acquire Internet-of-Things (IoT) software platform Jasper Technologies for more than $1.4 billion, Cisco said Wednesday after the market close. Cisco ( CSCO ) stock rose 1.3% in the regular session in the stock market today , to 22.10, 23% off an eight-year high touched last March. “Jasper is the industry’s leading IoT service platform in terms of number of enterprises and service providers,” Cisco said. Privately held Jasper’s CEO, Jahangir Mohammed, will run Cisco’s new IoT Software Business Unit under Rowan Trollope, Cisco senior vice president and general manager of the company’s IoT and Collaboration Tech Group. The acquisition is expected to close in Cisco’s third quarter ending in April. One of Jasper’s founders, Mohammed reportedly recently raised $50 million from Temasek and earlier from venture capital firms Benchmark Capital and Sequoia Capital. Cisco is scheduled to release earnings for its Q2 ended in January on Feb. 10, after the close. Analysts expect EPS ex items to rise 2% to 54 cents. “Investors have become more frustrated with these traditional tech stalwarts like Cisco,” FBR Capital Markets analysts Daniel Ives told IBD. A consistent critic of the single-digit slow growth of Cisco and other legacy tech firms, Ives said: “IoT represents a major growth opportunity over the coming years, which we believe is going to be one of the core parts of the next-generation build-out of enterprise.” He predicted “more significant M&A in 2016 than 2015. This is a sign of things to come across tech.” Cisco said that “many of the world’s largest enterprises and service providers are using the Jasper platform to scale their IoT services (connecting) any device — from cars to jet engines to implanted pacemakers — over the cellular networks of global service providers, and then (managing) connectivity of IoT services through Jasper’s Software-as-a-Service (SaaS) platform.” The company said it would pay $1.4 billion in cash “and assumed equity awards, plus additional retention-based incentives” for Silicon Valley-based Jasper. Scalper1 News
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