Cisco Systems Inc. (Nasdaq: CSCO) has confirmed that it will acquire Israeli startup Leaba Semiconductor. Cisco head of M&A Rob Salvagno said, "Under the terms of the agreement, Cisco will pay $320 million in cash and assumed equity awards, plus additional retention based incentives."
He said, "I am pleased to announce Cisco's intent to acquire Leaba Semiconductor, a venture-backed fabless semiconductor company based in Israel. Leaba is a team with a strong and successful track record of designing leading edge networking semiconductors that provide innovative solutions to address significant infrastructure challenges
Very few details are known about the Caesarea-based company, which was established in 2014, and operates in stealth mode. Its website says that "Leaba is a fabless semiconductor company providing innovative solutions for significant infrastructure challenges. Leaba is backed by blue-chip investors and led by seasoned entrepreneurs and prominent technology experts. Leaba is assembling one of the best teams of engineering."
The company was founded as Arena Semiconductor by CEO Eyal Dagan and CTO Ofer Eini who set up and sold Dune Networks to Broadcom in 2009 for $200 million. The pair received $50 million from that deal.
Investors in Leaba reportedly include Pitango Venture Capital and Bessemer Venture Partners, which hold 13% and 15% respectively, while Dagan and Eini hold only a 2% stake each. 53% of the company is held in trust and it is not clear who holds these shares.
This is Cisco's 12th acquisition in Israel, the most recent one being that of Ra'anana-based self optimization network software company Intucell for $475 million in 2013.
Cisco said, "Cisco is continually examining the best options that will allow it to provide future needs for the market, including, companies related to semiconductors. We check various strategic options including: acquisitions, partnerships and integrations. When there is any news, we will report it in the acceptable fashion.