Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Cisco to Acquire Inlet Technologies, May Be Looking for More Deals

Cisco Systems said today it will spend $95 million to acquire Inlet Technologies, a privately held player in the streaming video market based in Raleigh, N.C. Cisco said the deal will boost its Videoscape TV platform.

Videoscape is Cisco’s attempt to bring TV and Web content, including social media, into what it calls an “immersive” experience, whether at home or on a mobile device. Inlet’s technology is widely used in streaming video, and can adjust its quality based on network conditions.

Inlet’s customers include Major League Baseball, the BBC, Microsoft, NBC and Yahoo. Its investors are Capitol Broadcasting, which operates a group of TV stations in North Carolina, Core Capital Partners, Telecommunications Development Fund, two VC firms based in Washington, D.C., and Technology Venture Partners, a VC firm based in Minnesota.

For Cisco, it’s the latest in a string of small acquisitions. Last month it acquired Pari Networks, a networking management firm. And in December it acquired LineSider, which makes network management software. Both of those deals were small enough that terms weren’t disclosed. Cisco still sits on roughly $39 billion in cash, among the biggest hoards of cash in the tech universe.

And as it happens, that pile just got bigger. According to a recent SEC filing, Cisco just authorized the issuing of up to $3 billion in corporate debt. The filing, dated Jan. 31, says that Cisco will use the proceeds for “general corporate purposes,” which includes a litany of things: Buying back stock, repaying debt, paying dividends and, notably, acquisitions.

Given that it has so much cash, I thought it interesting that Cisco was issuing debt. I asked Cisco spokeswoman Kristin Carvell about it. She told me it’s something Cisco regularly does for financial flexibility. “In this case, commercial paper rates are extremely attractive as a source of added liquidity going forward.”

Does that added liquidity suggest more acquisitions? It just might. Time will tell.