Cisco to buy Starent Networks for $2.9 billion
The giant data networking company Cisco Systems Inc. will pay $2.9 billion to acquire Starent Networks Corp. of Tewksbury, a fast-growing maker of equipment that lets cell phone companies handle massive amounts of digital data traffic.
“Obviously they’ve been a great success story here in the Boston area, and they are a global leader in enabling wireless networks to adapt to the growing demand for mobile data," said Ned Hooper, Cisco's chief strategy officer.
The deal underscores the dramatic worldwide surge in demand for cellular data services, driven by the popularity of laptop computers and smartphones like Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry.
Phil Marshall, a research fellow at Boston's Yankee Group, said that the world's cellular networks will have to double their data-carrying capacity every year for the next six years to keep up with demand.
"This is a very strategic market that Cisco needs to establish a stronger play in," Marshall said.
Starent, founded in 2000, makes equipment that collects streams of digital data from mobile devices, accurately tracking the billions of packets and routing them in the most cost-efficient manner. The company began specializing in this technology well before demand for cellular data began to surge, giving Starent a lead over rival wireless networking companies like Alcatel-Lucent, Nokia Siemens Technologies, and Cisco.
To read Cisco's press release about the proposed acquisition, please click here.
Starent ranked fourth in the Globe 100, the annual survey that tracks the performance of publicly traded companies based in Massachusetts. To read the Globe 100 story about Starent, please click here.