Three days ago (1/23/2013), Cisco (Stock: CSCO) announced yet another acquisition. This time, the firm is looking to acquire privately held Intucell, a company that provides advanced network software, “which enables mobile carriers to plan, configure, manage and optimize cellular networks automatically, based on real-time changing network demands”.
The Intucell acquisition, if successful, is expected to improve CSCO’s price multiples and profit margins. In the last three months, Cisco’s stock (CSCO) has risen over 22%.
Cisco has been on an acquisition spree as a strategy to expand its business operations. In 2012 alone, it acquired over ten companies, including Lightwire, ClearAccess, NDS Group, Truvisco, Virtuata, ThinkSmart Technologies, vCidar, Cloupia, Meraki, Cariden Technologies and Broadhop.
The firm’s strategy is to be at the epic center of technological change. As stated on Cisco’s 2012 Q4 earnings report: “there is no question that our industry and our world are evolving quickly and Cisco is squarely at the center of major technology market transitions — cloud, mobile, visual, virtual and social."[related1][/related1]