Cisco/Webex Acquisition

Mr. Beach, President of Boston Corporate Finance and M&A International provides some thoughts on the Cisco/Webex acquisition that was turned into a pitch letter.

"This is a very clean and clear strategic transaction. As the need for integrated communications throughout large enterprises develops, there are two primary pieces required for smooth execution. The first is a strong network infrastructure. The second is a proven platform allowing for an intuitive interface for managing communication sessions which is robust enough to satisfy the needs of a demanding customer base. Cisco, already the #1 network infrastructure provider has just acquired the best known and must reliable software platform for integrated communications. Both companies are the “standards” for their respective areas, and together they will combine their marketing and brand positions to move their customers into a much deeper penetration of the capabilities throughout the enterprise.

"The main driver for the mega trend for integrated communication over the network is the requirement for collaboration across many locations and within many different business units. This overall trend has been very for the past five years, but is still not fully implemented by most enterprises both within their own organizations and then with their extended suppliers and partners. By 2010, we believe that the penetration of this collaborative and open communication of ideas will have much deeper penetration within most enterprises, and as that occurs, the need for both infrastructure and the software to manage the communications will increase sharply.

"At an initial look, the valuation appears to be high, but once the subscription side of Webex’s business is factored into the mix, the valuation appears to be in line with what we would expect."