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

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

Summary: 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.

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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.

Topic: Cisco

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2 comments
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  • Wow. $590M for a camcorder builder?

    That is an astonishing amount to pay for a low end camcorder company. There must be more to this to pay 1/2 Billion for this.
    if I had to guess at a number it would be more like $10M.
    Prognosticator
    • Unless you have been living under a rock

      Pure Digital is not just a "low end camcorder
      company". It's THE company. Thousands of people
      use their camcorders to capture videos that
      then upload to Youtube. And, as you can see in
      hundreds of reviews around the web, the vast
      majority of users and reviewers are highly
      satisfied

      I am surprised they paid so little. I also
      think it sucks that a company that is so little
      focused on the consumer have bought Pure
      Digital
      markbn