Cisco to Buy Pure Networks for $120M

July 25, 2008

Cisco plans to purchase privately held Pure Networks, a Seattle-based leader in home networking-management software and tools. Pure Networks' home networking-management solution allows users to easily set up and manage a home network and connect a range of devices, applications and services within a home.

Cisco believes the industry is amid a transition from Home Networking 1.0, in which home networks are largely designed to share a broadband connection that links PCs and peripherals, to Home Networking 2.0, in which the multimedia-enabled home will be comprised of a multitude of disparate network devices, applications and services that are connected to one another. The acquisition of Pure Networks provides Cisco with a fully integrated home networking-management solution that will also serve as the foundation for the development of new applications, tools and capabilities for consumers to use in an increasingly "connected life" at home, at work and on the go.

Pure Networks currently partners with Cisco to provide the software infrastructure and tools used to create the Linksys Easy Link Advisor (LELA) which allows a consumer to more easily set up, organize, manage, secure and use a home network. The acquisition strengthens Cisco's vision of the network as the cornerstone of the "connected life" by enabling further development of the existing LELA platform which will serve as the base for new multimedia-enabled applications, tools and capabilities. Pure Networks' products and solutions can also provide the foundation for service providers to manage home networks on behalf of consumers.

"With the rapid proliferation of networking technology and new consumer electronics devices, the ability to quickly and easily connect to a range of devices, content and services throughout the home is becoming paramount to achieving a satisfying consumer experience," said Ned Hooper, senior vice president for Cisco's Corporate Development and Consumer Group. "Pure Networks' network-management innovations will provide Cisco and Linksys with a key underpinning to take home networking to the next level of ease of use."

The Pure Networks acquisition follows Cisco's "build, buy, and partner" innovation strategy focused on capturing market transitions to expand existing product categories and enter new markets. By attaining Pure Networks' valuable network-management technology and intellectual property along with a dedicated research and development team, Cisco will be able to further advance its consumer strategy.

Under the terms of the agreement, Cisco will pay approximately $120 million in exchange for all shares of Pure Networks. The acquisition of Pure Networks is subject to various standard closing conditions and is expected to be complete in Cisco's first quarter of fiscal year 2009. Upon the close of the acquisition, Pure Networks' employees will remain in Seattle and be integrated into Linksys, led by Mike Pocock, Linksys senior vice president and general manager.