Cisco makes a rare hardware play with Leaba Semiconductor acquisition

20151005 Cisco headquarters sign

A large sign at the curb greets arrivals at Building 9 of the Cisco Systems campus in San Jose, California, on Oct. 5, 2015.

Credit: Stephen Lawson

Cisco is buying a chip design company that could bolster its data center networking expertise

Cisco Systems is buying chip expertise that could help it in the data center.

The networking giant's latest acquisition target is Leaba Semiconductor, a fabless semiconductor company based in Israel.

The company is "in stealth mode," according to its website, which indicates only that it develops semiconductors to address "significant infrastructure challenges."

Cisco had little more to say concerning Leaba's field of work in its blog post about the acquisition by Rob Salvagno, head of its mergers, acquisitions and venture investment team.

However, according to information provided by Israel's Ministry of Economy, Leaba specializes in the design of chips for connecting memory, storage and compute in data center environments.

The company's software manager, Omer Sali, is a former data center manager, according to his LinkedIn profile, while the company's CEO Eyal Dagan and other senior figures are former employees of semiconductor company Broadcom.

Cisco will pay $320 million in cash and equity for the young company, and plans to incorporate it into its own engineering team, reporting to its Core Hardware Group, led by Senior Vice President Ravi Cherukuri.

The acquisition is a rare hardware play for Cisco, which in recent years has focused on buying software firms to bolster its cloud, security, analytics and Internet of Things capabilities. On Tuesday it bought CliQr, a cloud orchestration specialist, and last month splashed $1.4 billion on IoT management platform Jasper Technologies.

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