The Mountain View, Calif., tech shop makes programmable server switches for data applications, storage and computer networking. The move will give San Jose, Calif.-based Cisco a new crack at an advanced generation of switching that connects servers.
Cisco needs new product markets to revive its growth prospects. In recent years, the company has targeted areas such as security and storage networking as potential growth areas. But in storage, for example, nearly two years of toil have left Cisco with
only a small portion of the business.
The Cisco buyout is the second for Topspin's CEO Krish Ramakrishnan, who originally joined Cisco in 1995 when Cisco bought his previous company, Internet Junction. Ramakrishnan then left Cisco to run Topspin, which was founded in 2000.
The deal, which is due to close this summer, also ranks as one of the pricier acquisitions for Cisco in recent years -- at least on the all-important price-per-employee scale. Topspin has about 135 employees, so the deal translates to roughly $1.8 million a head.
Cisco acquired 11 companies last year, and nearly half of those involved outfits with network-security-related technologies. The per-employee price of some of those bigger deals was about $1.7 million.
Cisco shares were flat at $18 in early trading Thursday.