Making its 124th acquisition, network equipment maker Cisco Systems Inc. agreed Tuesday to buy Navini Networks Inc., a communications equipment company that specializes in the WiMax long-range wireless technology, for $330 million in cash and assumed options.
Cisco said the technology, which enables users to access the Internet from their computer without connecting to a landline cable, router, or switch, could help it expand business in developing countries with little technology infrastructure.
WiMax offers wireless access over a significantly wider area than the increasingly popular Wi-Fi technology but is more expensive, meaning those who deploy WiMax are generally service providers and governments rather than regular consumers. Cisco called Navini a pioneer in "smart beamforming" technology, which involves swinging a radio beam around quickly to ensure stable Internet access across a large area.
The $330 million deal gives closely held Navini's venture capital investors a nice return on their investment. In May, the company raised a series F financing of $50 million. The round was co-led by Austin Ventures of Texas and Arcapita Ventures, the venture capital arm of Arcapita Bank of Atlanta.
The round of funding introduced a new investment from Scottwood Capital and also included participation from existing investors Granite Ventures, Investor Growth Capital, Lehman Brothers Venture Partners, Sternhill Partners, Intel Capital and Motorola Ventures.
Navini has struggled to reach profitability despite previous investments of more than $140 million over seven years. Founded as a maker of proprietary wireless networking systems, the company has realigned and repurposed several technologies around the standards-based WiMax technology. Offering Internet access through such technology is less cumbersome and costly than building copper and fiber networks, which are regularly stolen and sold for scrap or, in Africa, used in basket making.
The deal is expected to close in Cisco's 2008 second fiscal quarter, which ends Jan. 27. Cisco said it plans to integrate Navini into its wireless networking business unit.
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