Cisco Flips for Pure Digital; Acquires it for $590 million

Cisco Systems said Thursday that it is acquiring Pure Digital Technologies, maker of the Flip video camcorder, for $590 million.Cisco said the acquisition of privately held Pure Digital is in keeping with its strategy to take more share of your home network.

Cisco Systems said Thursday that it is acquiring Pure Digital Technologies, maker of the Flip video camcorder, for $590 million.

Cisco said the acquisition of privately held Pure Digital is in keeping with its strategy to take more share of your home network. The linchpins of Cisco's effort are Linksys routers and its Scientific-Atlanta cable set-top boxes. Now you can add the handy Flip video camcorders (review) to the list too as a front-end device. Cisco began its home networking push in 2003 with the acquisition of Linksys and acquired Scientific-Atlanta in 2005. Last year, it added Pure Networks, which provides home networking management software. Pure Digital will give Cisco a popular device--2 million Flip camcorder units sold--to network. 

In a statement, Cisco noted that it will develop new video capabilities and take advantage of Pure Digital's FlipShare software, which organizes and edits video an enables easy uploading to social sites.

Pure Digital will be wrapped into Cisco's consumer unit. Pure Digital CEO Jonathan Kaplan will become general manager of Cisco's consumer unit, which includes Linksys, audio and storage products. Kaplan will report to Ned Hooper, president of Cisco's corporate development and consumer groups.

To keep the Pure Digital team around Cisco is tossing in $15 million in retention-based equity incentives. The deal is expected to close in Cisco's fourth quarter.

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