SAN JOSE, CA--(Marketwired - Jun 17, 2014) - Cisco (NASDAQ: CSCO) today announced its intent to acquire privately held Tail-f Systems, a leader in multi-vendor network service orchestration solutions for traditional and virtualized networks. Tail-f's products help service providers and enterprise IT organizations easily and cost-effectively implement applications, network services and solutions across networking devices. Headquartered in Stockholm, Sweden, Tail-f's technology also helps reduce the time-to-market for network equipment vendors building equipment for agile, software-programmable networks.
Surging network traffic volumes and sprawling infrastructures have made managing service provider networks more expensive and complex, while increased competition is driving service providers to introduce new services at a rapid rate. Customers are turning to Cisco to use cloud technology to deliver new services with greater agility at lower costs.
The acquisition of Tail-f accelerates Cisco's cloud virtualization strategy of delivering software that increases value to our customers' applications and services, while supporting Cisco's long-standing commitment to open standards, architectures, and multi-vendor environments. With Tail-f's network service orchestration technology, Cisco's service provider cloud and virtualization portfolio will simplify and automate the provisioning and management of both physical and virtual networks. Tail-f's solutions are equally applicable for today's network problems, such as layer 2 or layer 3 VPN provisioning, and next-generation networking based on network function virtualization (NFV) and network programmability.
"With a rapidly increasing number of people, devices, and sensors connecting across the Internet of Everything (IoE), service providers require new capabilities to deliver value-added, cloud-based services and applications," said Hilton Romanski, senior vice president, Cisco Corporate Development. "Our goal is to help to eliminate the bottleneck caused by operational complexity within the network. The acquisition of Tail-f's network services configuration and orchestration technology will extend Cisco's innovation in network function virtualization, helping service providers reduce operating costs and the time it takes to deploy new services, making agile service provisioning a reality."
Upon completion of the acquisition, Tail-f employees will join Cisco's Cloud and Virtualization Group led by Gee Rittenhouse, vice president and general manager. Under the terms of the agreement, Cisco will pay approximately $175 million in cash and retention-based incentives in exchange for all shares of Tail-f. The acquisition of Tail-f is expected to be complete in the fourth quarter of fiscal year 2014, subject to customary closing conditions.
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This press release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the expected completion of the acquisition and the time frame in which this will occur, the expected benefits to Cisco and its customers from completing the acquisition, and plans regarding Tail-f personnel. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, the potential impact on the business of Tail-f due to the uncertainty about the acquisition, the retention of employees of Tail-f and the ability of Cisco to successfully integrate Tail-f and to achieve expected benefits, business and economic conditions and growth trends in the networking industry, customer markets and various geographic regions, global economic conditions and uncertainties in the geopolitical environment and other risk factors set forth in Cisco's most recent reports on Form 10-K and Form 10-Q. Any forward-looking statements in this release are based on limited information currently available to Cisco, which is subject to change, and Cisco will not necessarily update the information.