Cisco continues M&A spree with $320M+ purchase of secretive Israeli chipmaker

By: Eric Jhonsa, SA News Editor

Cisco (CSCO -0.3%) is paying $320M in cash and assumed equity awards, plus retention-based incentives, to buy Leaba Semiconductor, an Israeli networking chipmaker that has been in stealth mode since its founding in 2014.

Leaba's site only describes the company as "a fabless semiconductor company providing innovative solutions for significant infrastructure challenges." Cisco merely says Leaba has "a team with a strong and successful track record of designing leading edge networking semiconductors that provide innovative solutions to address significant infrastructure challenges," and that the purchase will help accelerate Cisco's plans for its next-gen products. Leaba's CEO and CTO were previously co-founders of Dune Networks, a provider of Ethernet switch fabric chips that was sold to Broadcom for $178M in 2009.

Though also using off-the-shelf network processors (NPUs), Cisco continues heavily relying on internally-developed ASICs to power its switches and routers. In 2013, the company unveiled the nPower X1, which powers its CRS and NCS core router lines. Last year, EZchip (recently acquired by Mellanox) disclosed Ciscodoesn't plan to use the company's NPUs in next-gen edge router line cards, as it does in current line cards.

News of the deal comes just a day after Cisco announced it's buying cloud app management software provider CliQr Technologies for $260M+, and a month after it announced a $1.4B+ deal to buy IoT service provider Jasper Technologies.