Cisco will pay approximately US$590 million in stock in exchange for all shares of Pure Digital. In addition, Cisco will provide up to US$15 million in retention-based equity incentives for continuing employees.
"The acquisition of Pure Digital is key to Cisco's strategy to expand our momentum in the media-enabled home and to capture the consumer market transition to visual networking," said Ned Hooper, senior vice president of Cisco's Corporate Development and Consumer Groups.
US-based Pure Digital develops consumer-friendly video products for the home, the vendors product range includes diminutive camcorders with integrated video uploading features to site like YouTube.
"Pure Digital has revolutionised the way people capture and share video with Flip Video. This acquisition will take Cisco's consumer business to the next level as the company develops new video capabilities and drives the next generation of entertainment and communication experiences," said Hooper.
The Pure Digital team will become part of Cisco's Consumer Business Group, which includes Linksys by Cisco home networking.
"Flip Video puts the power to instantly capture, edit and share video into the hands of everyday consumers," said Jonathan Kaplan, chairman and CEO of Pure Digital. "By combining forces with Cisco, we join a company that shares our passion for video and whose global scale and tremendous technology expertise we expect will enable us to quickly expand and enrich the Flip Video experience." Kaplan will become general manager of the combined organisation, reporting to Hooper.
The acquisition is subject to various standard closing conditions and is expected to close in the fourth quarter of Cisco's fiscal year 2009. The acquisition will be accounted for in accordance with generally accepted accounting principles.
Issue: 315 | May 2013
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