Cisco Unloads Linksys Unit

News Analysis Jeff Baumgartner, Senior Editor, Light Reading 1/24/2013

Belkin Corp. has struck a deal to acquire Cisco Systems Inc.'s Linksys home networking business unit for an undisclosed sum, marking Cisco's latest exit from a consumer-facing business. The deal comes about a month after rumors surfaced that Cisco was shopping the unit, and had hired Barclays Capital to find a buyer. (See Rumor: Cisco Looking to Sell Linksys Unit.) Cisco and privately held Belkin didn't say how much money would be changing hands or how many employees would be joining Belkin when the deal is closed in March. Cisco acquired Linksys for $500 million in March 2003. But Cisco will still keep Linksys and its technology within arm's reach. "Belkin and Cisco intend to pursue a strategic relationship focused on a variety of initiatives including retail distribution, strategic marketing and products for the service provider market," Hilton Romanski, the head of corporate business development at Cisco, said in this blog post about the deal. Why this matters
For Cisco, the deal will move another consumer-oriented business off its plate, and continue a process that started last year as the company sought to simplify itself and deepen its focus on service provider customers. It also marks a rare divestiture for Cisco. The deal should expands Belkin's already sizable retail presence. It estimates that it will account for roughly 30 percent of the U.S. retail home and small business networking market once Linksys is added to the fold. For more

— Jeff Baumgartner, Site Editor, Light Reading Cable