Cisco to Sell Linksys Division

Cisco has hired Barclays to find a buyer for Linksys, which makes routers for home wireless access, said people with knowledge of the situation. The unit may attract the interest of TV set makers seeking a recognized brand and technology, said the people, who asked not to be identified because the process isn’t public. Linksys is likely to fetch much less than the $500 million Cisco paid for it in 2003 because it is a mature consumer business with low margins, the people said. 

Enlarge image Cisco wants to sell Linksys as part of its strategy to exit consumer businesses while expanding in corporate software and technology services. Photographer: Chris Ratcliffe/Bloomberg Karen Tillman, a spokeswoman for San Jose, California-based Cisco, and Marc Hazelton, a spokesman for London-based Barclays, declined to comment. Cisco wants to sell Linksys as part of its strategy to exit consumer businesses while expanding in corporate software and technology services. Chief Executive Officer John Chambers eliminated 7,800 jobs over the past year and closed businesses such as the Flip video-camera unit amid a slowdown in sales growth after a foray into consumer technologies backfired. In addition to Linksys, Cisco also operates in the home market with its Scientific Atlanta set-top-box unit and with NDS Group Ltd., a software maker for paid-television channels used by British Sky Broadcasting Group, Canal Plus and DirecTV. Cisco bought NDS in July for $5 billion. Barclays is also advising Google Inc. (GOOG) on the sale of its Motorola Home Business, which sells set-top-boxes and equipment to cable-television-providers.