(Associated Press via NewsEdge) Cisco Systems has agreed to acquire the online meeting company WebEx Communications for about $3.2 billion in cash, a takeover that furthers Cisco's push beyond its core market for networking gear and into the lucrative arena of business communications.
Cisco, the leading maker of routers and switches that direct data over computer networks, said it will pay $57 per share of WebEx Inc. That represents a 23% premium over WebEx's closing price of $46.20 on the Nasdaq Stock Market.
The acquisition has been approved by both boards and is expected to close in the fourth quarter of fiscal 2007, Cisco said. Cisco said it expects the transaction to have a neutral effect on its fiscal year 2008 earnings after one-time charges are subtracted.
The total purchase price will be about $2.9 billion when factoring in WebEx's $300 million in cash on hand.
San Jose-based Cisco has recently made a number of acquisitions branching out from its core business of supplying networking gear, namely in communications, social networking and other areas that help drive traffic over the network and increase demand for its core equipment.
The acquisition was Cisco's 119th since 1993 and follows several other major recent takeovers by the company.
WebEx CEO Subrah Iyar said Cisco plans to preserve the company's subscription-based business model that he said has been key to WebEx's strategy in attracting new customers and driving sales.
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