Technology powerhouse Cisco Systems (NASDAQ: CSCO) announced the acquisition of private company Cognio. The financial terms were not disclosed as is Cisco's nature to when acquiring private companies. Obviously, it must reveal purchase price and terms if it acquires a public company, as it recently had with WebEx. Cisco paid over $3 billion for WebEx. Cognio adds to Cisco's portfolio in the wireless technology sector.
Cisco Systems is the expert in integrating acquisitions into its ever-growing tent. To date, it has acquired over 130 companies since 1993. Cisco has re-defined the world of research and development (R&D), as while it has been the master of development, it hasn't bothered too much with the research side of the tandem. Cisco's strength lies in integrating a newly acquired entity very quickly and very seamlessly into its own operations. From where every one sits in the headquarter building to the finite points of its 401k plan, Cisco has an internal team that jumps into action the moment its CEO blesses and signs on the bottom line.
Cisco has made some brilliant acquisitions in the past such as Scientific Atlanta and WebEx, as well as some duds. The beauty of Cisco's strategy is to recognize mistakes quickly, correct them and march on. Nurturing a bad acquisition is not in its make up. Cisco will eliminate non-cooperating staff with lightning speed while retaining the valuable technology of the acquired.
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