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Warburg hires Cisco M&A chief

by Tom Park  |  Published August 23, 2011 at 8:58 AM ET
Cisco Systems Inc.'s top M&A executive, Charles Carmel, has left the company to join the private equity world.

Carmel, who joined Cisco in September 2001, served his last day at the company on July 29, a representative confirmed. He has been hired by New York-based private equity firm Warburg Pincus as a managing director in its San Francisco office.

Carmel has been replaced by Hilton Romanski, who had been part of the corporate business development team but left about a year ago to head up strategy in Cisco's services provider division. Romanski, who reports to Ned Hooper, the company's chief strategy officer and senior vice president, spent nearly 10 years in Cisco's corporate development department. He oversaw nearly 20 acquisitions, including the company's $2.9 billion purchase of Starent Networks Corp. in 2009. Before joining Cisco, Romanski worked for J.P. Morgan Chase & Co.'s investment banking division, focusing on technology, media and telecom out of San Francisco.

Carmel started his dealmaking career in the mid-1990s in Goldman Sachs Group Inc.'s technology group. He then entered Stanford University's M.B.A. program, got a summer internship in 2000 in Cisco's corporate development group and was hired full time in September 2001.

"Charles' experience and expertise in venture capital, M&A and technology are an excellent fit with Warburg Pincus' growth-oriented approach to investing," said Pat Hackett, a Warburg Pincus managing director who heads the firm's TMT group.

The news emerged as Cisco announced its first acquisition since it unveiled a companywide restructuring in April. The company said late Sunday that it would pay $31 million in cash to acquire software assets of Comptel Corp., a Finnish maker of technologies for telecom services providers.

The assets and employees to be acquired will be carved out of Comptel's U.K. subsidiary, formerly known as Axiom Systems. Comptel acquired Axiom in 2008 for as much as $36 million in a deal that included a potential $23 million earnout.

Cisco's purchase of the assets will bring 25 software development and professional services employees. In a blog, Comptel said chief technology officer Gareth Senior will join Cisco as part of the deal.

The acquired services fulfillment software will augment Cisco Prime, the company's services provider management software stack. The software helps manage the routers, switches, network and services that make up a service provider's offerings, said Joydeep Bose, a Cisco corporate development director.

"This fits extremely well with our Prime architecture," Bose said. "The ability to create new services and activate them is becoming an important part of running a business."

The deal falls into switching, routing and services, a market area outlined by Cisco in May as one of its five company priorities. The company announced its new focus after it said in April that it would shutter or pare several consumer divisions, including the Flip video camera unit it acquired for $598 million in 2009.

Last month, Cisco said it would reduce its workforce by 6,500, or roughly 9%. The company simultaneously said it had agreed to sell to Foxconn Technology Group a 5,000-person manufacturing facility it had gained through its Scientific-Atlanta Inc. acquisition in 2006.

Bose, who is based in Bangalore, India, and focuses on corporate development in the services area, said the realignment of Cisco's corporate priorities has helped his group.

"The activity of this team is equal if not more than what it was earlier," Bose said. "The chances of getting diffused is less because we are very purpose specific; we are all going in the same direction."