Cisco in €3.4bn swoop for software firm AppDynamics
CISCO Systems has agreed to buy AppDynamics for $3.7bn (€3.44bn), snapping up the fast-growing software maker just before it planned to go public.
Cisco, the world's biggest maker of networking gear, will add AppDynamics software and services, which help companies to monitor and fine-tune the performance of their own business systems.
AppDynamics, based in San Francisco, was scheduled to price its initial public offering on Wednesday in this year's first major US technology IPO, according to data compiled by Bloomberg.
Ceo Chuck Robbins has been buying software and services companies, working to fire up Cisco's revenue growth, which has stalled as the computing industry shifts away from expensive fixed hardware and software. Since taking the helm in 2015, Robbins has sought to transform Cisco by offering customers more flexible, customisable products that will generate recurring revenue over time.
"It is important for Cisco to have market-leading software in our portfolio," said Hilton Romanski, Cisco's head of corporate strategy. "This asset is best in class."
The acquisition will be paid for with cash and assumed equity awards, San Jose, California-based Cisco said in a statement. AppDynamics will become a unit in Cisco's IoT and Applications business, reporting to Rowan Trollope.
The deal is expected to close in Cisco's fiscal third quarter, which ends in April. Founded in 2008, AppDynamics helps businesses track how well their applications and websites are running so they can respond to connection slowdowns or crashes. (Bloomberg)