Cisco continues spending spree

NEWS Cisco Systems has bought optical networking specialists, Cerent, in a deal worth $6.08bn (£3.82bn), making it the most expensive purchase yet in the networking giant's recent acquisition drive. Cisco CEO, John Chambers, said he wanted his company to be the leader in optical networking and added: "We don't think this can be done by one company without combining skills." He said the price was high because the pending Cerent IPO (initial public offering) required Cisco to peg the valuation to other networking IPOs. Cerent, a manufacturer of fibre-optic switching equipment, recently posted only $10m in sales and in the last two-and-a-half years has failed to make a profit. The company has made several deals in recent weeks. It bought Monterey Networks for $450m (£280m) in a bid to boost sales in the telecommunications business. The company also snapped up a 20 per cent stake in accounting and consultancy firm, KPMG, and paid $55m (£34m) for UK-based Internet company, Callista.