(Reuters) - Cisco Systems Inc said on Thursday it would buy Duo Security, a venture capital-backed cyber security company, for $2.35 billion in cash, as it seeks to expand its offerings in cloud computing.
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The deal is the biggest acquisition for Cisco since its $3.7-billion purchase of business performance monitoring software company AppDynamics last year, and its largest in the cyber security sector since its $2.7-billion takeover of Sourcefire in 2013.
Duo's platform allows users to verify their identity with a two-step authentication and its investors include Index Ventures, Workday, Redpoint Ventures and True Ventures.
The deal is expected to close in the first quarter of Cisco's fiscal 2019.
Reuters had reported earlier in the day that Cisco was in advanced talks to buy the company.
Cisco, the world's largest networking gear maker, has been making efforts to transform itself into a software-focused company.
With its traditional business of making switches and routers struggling, Cisco has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.
Shares of the company were down about 1 percent at $41.45 before the bell. (Reporting by Liana B. Baker in New York and Akanksha Rana in Bengaluru Editing by Nick Zieminski and Anil D'Silva)