Cisco to Buy Starent Networks for $2.9 Billion

October 13, 2009 Updated: October 1, 2015

In this file photo, Cisco Chairman and CEO John delivers a keynote address during the RSA Conference in San Francisco, California. Cisco Systems announced that it was buying Starent Networks, which makes multimedia infrastructure for mobile operators. (Justin Sullivan/Getty Images)
In this file photo, Cisco Chairman and CEO John delivers a keynote address during the RSA Conference in San Francisco, California. Cisco Systems announced that it was buying Starent Networks, which makes multimedia infrastructure for mobile operators. (Justin Sullivan/Getty Images)
NEW YORK—Networking behemoth Cisco Systems announced Tuesday that it was buying out Starent Networks for $2.9 billion, its second major acquisition in three weeks.

Cisco said it would pay $35 a share, a premium of 20 percent over Starent's closing price on Monday evening. The acquisition is reported to be all-cash.

Massachusetts-based Starent Networks provides infrastructure solutions for mobile operators allowing them to deliver multimedia and video content to subscribers.

The company also provides solutions that allow mobile operators to manage access, mobility and billing for subscribers.

The purchase is expected to give Cisco greater inroads into the mobile infrastructure industry. Cisco said that it expected to complete the purchase by the middle of 2010, subject to "closing conditions and regulatory reviews."

Shares of both Cisco and Starent jumped in early trading. While Cisco posted modest gains, Starent's stock jumped by around 18 percent.

Three weeks ago, Cisco announced its purchase of Norway-based Tandberg in a $3 billion deal. Tandberg is a maker of videoconferencing systems.

Cisco is trying to expand into the conferencing and video-conferencing area through products such as Cisco Telepresence. Analysts predict that Cisco is using its strong cash position to expand into other networking fields in areas of growth such as the video-conferencing and mobile industries.