8-KOther EventsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Corporate Update (Oct 14, 2009)

Filed October 14, 2009For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) announced on October 13, 2009, its definitive agreement to acquire Starent Networks, Corp. for approximately $2.9 billion in cash. Starent Networks is a key player in IP-based mobile infrastructure solutions, aligning with Cisco's strategy to expand its presence in the mobile carrier market. The acquisition is expected to close in the first half of calendar year 2010, subject to regulatory approvals and customary closing conditions. This move signals Cisco's intent to bolster its Service Provider Business, integrating Starent Networks into a new Mobile Internet Technology Group. While the acquisition is projected to be dilutive to non-GAAP earnings in fiscal years 2010 and 2011, Cisco anticipates it will become accretive in fiscal year 2012. Investors should monitor the regulatory review process and the integration progress as key factors influencing the realization of anticipated benefits.

Key Highlights

  • 1Cisco to acquire Starent Networks for approximately $2.9 billion in cash.
  • 2Starent Networks specializes in IP-based mobile infrastructure solutions.
  • 3Acquisition aims to enhance Cisco's Service Provider Business and mobile offerings.
  • 4Expected closing in the first half of calendar year 2010, pending customary conditions and regulatory review.
  • 5Transaction is expected to be dilutive to non-GAAP earnings in FY2010-2011, becoming accretive in FY2012.
  • 6Significant stockholders of Starent Networks (19.1%) have agreed to vote in favor of the transaction.
  • 7Starent Networks' leadership will head Cisco's new Mobile Internet Technology Group.

Frequently Asked Questions

The acquisition of Starent Networks strengthens Cisco's position in the rapidly growing mobile infrastructure market. Starent Networks' expertise in IP-based mobile solutions is expected to complement Cisco's existing offerings and enhance its Service Provider Business, particularly in the area of mobile internet technology.

Cisco anticipates that the acquisition will be dilutive to its non-GAAP earnings per share in fiscal years 2010 and 2011. However, it is projected to become accretive to non-GAAP earnings in fiscal year 2012, indicating a long-term positive financial impact.

The transaction is expected to close during the first half of calendar year 2010. The completion is contingent upon satisfying customary closing conditions and obtaining necessary regulatory approvals.

Cisco will pay $35 per share in cash for each share of Starent Networks, with an aggregate purchase price of approximately $2.9 billion. This includes the assumption of outstanding equity awards.