Instant Analysis: Cisco Buys an Israeli Semiconductor Company for $320 Million

By Markets Fool.com

What happened?
IT networking hardware and services powerhouse Cisco Systems is in the midst of an apparent shopping spree. In the latest in a series of purchases, the company said in an official blog post that it bought Leaba Semiconductor, an Israel-based start-up that manufactures chips for networking hardware.

Continue Reading Below

IMAGE SOURCE: CISCO

The price is $320 million in cash, in addition to assumed equity awards and retention-based incentives.

In the blog post, Cisco said that its new asset "advances our innovation strategy, supports continued differentiation of Cisco products and delivers on our goal to provide best-in-class solutions for our customers."

Does it matter?
Leaba Semiconductor is a bit of a black box at the moment. Among the few pieces of information on its website is a quote that says since it's operating "in stealth mode, we can't say much about what we are developing." As its product(s) and value remain mysteries, it's hard to judge how much of an impact Leaba will have on Cisco's business.

What is apparent is that Cisco aims to grow through acquisitions. The Leaba news comes on the heels of another deal, for cloud solutions provider CliQr Technologies at a price of $260 million. And early last month, Cisco announced it would buy Jasper Technologies, maker of a cloud-based Internet of Things service platform, for a cool $1.4 billion.

Continue Reading Below

These purchases also show that the company's collecting assets across at least several of its numerous business groups. This indicates a thoughtful, measured approach, rather than the raft of opportunistic purchasing it might seem at first glance. This isn't cheap, of course, but the company's got the dosh -- cash and short-term investments exceeded $60 billion at the end of January.

The article Instant Analysis: Cisco Buys an Israeli Semiconductor Company for $320 Million originally appeared on Fool.com.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.