Belkin to acquire Linksys from Cisco

Belkin announced its intention to buy Cisco's Home Networking Unit, which includes the Linksys brand. Rumors about a sale of Cisco's Linksys division hit the web in December, the company reportedly wants to exit the consumer business to expand its corporate software and technology services. At this point it's unknown how much Belkin will pay for Linksys, but it's likely to be less than the $500 million Cisco paid for it in 2003. Once the transaction is closed, Belkin will have roughly 30 percent of the US retail home and small business networking market.

Belkin, a private company based in Playa Vista, Calif., with operations and sales in more than 100 countries, today announced that it has entered into an agreement to acquire Cisco’s Home Networking Business Unit, including its proven products, technology, well-known Linksys brand and talented employees. With global operations, Linksys’ main office is located in Irvine, Calif.

“We’re very excited about this announcement,” said Chet Pipkin, CEO of Belkin. “Our two organizations share many core beliefs – we have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture. Belkin’s ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision.”

Belkin intends to maintain the Linksys brand and will offer support for Linksys products as part of this transaction. All valid warranties will be honored by Belkin for current and future Linksys products. After the transaction closes, Belkin will account for approximately 30 percent of the U.S. retail home and small business networking market.

“Linksys pioneered wireless connectivity capability around the globe, and has a strong brand renowned for its premium market position, the strength of its installed base and its proven dependability. Linksys users benefit from peace of mind in their home networking environment. At Belkin we have developed great insight into consumer needs, and the experiences, solutions and products we bring to the market, including our WeMo home automation platform, will help us to grow Linksys’ market presence,” Pipkin said.

“Linksys is one of the leading home networking providers and has created a market-leading suite of products and services to meet customer needs,” said Hilton Romanski, VP Corporate Business Development, Cisco. “While part of Cisco, Linksys has continuously innovated, while strengthening the brand and expanding its market leadership. As part of Cisco’s commitment to service providers, we are pleased about this strategic relationship with Belkin to build on Linksys’ position of strength.”

”With complementary innovation and engineering strategies in the combined organization, Belkin will be able to create new opportunities for consumers, distribution partners and resellers, and will have the strongest retail presence in the U.S. networking marketplace. Belkin also will have access to a large installed base that will be able to upgrade their networking environment to take advantage of new technologies in the smartphone, tablet, notebook and home automation arenas,” Pipkin said. “Additionally, Linksys will enhance Belkin’s capabilities to meet the needs of the service provider space and small business users.”

Belkin and Cisco intend to develop a strategic relationship on a variety of initiatives including retail distribution, strategic marketing and products for the service provider market. Having access to Cisco’s specialized software solutions across all of Belkin’s product lines will bring a more seamless user experience for customers. Merging the innovation capabilities of Linksys and Belkin provides a powerful platform from which to develop the next generation of home networking technology.

“At Belkin, we’re committed to enabling great experiences for users of today’s mobile and connected home technologies,” Pipkin said. “The acquisition of Linksys and the combination of Belkin’s and Linksys’ expertise and innovation will position us to meet the demands of today’s rapidly evolving advances in technology. We look forward to honoring the heritage of the Linksys brand and investing in the continuing evolution of its product portfolio. Together, we will provide a powerful, simple to use, and reliable wireless and networking platform for the markets we serve.”

Specific financial terms of the transaction are undisclosed. The transaction is subject to various standard closing conditions and is expected to close in March 2013.