Cisco will buy US communications software company BroadSoft for $ 1.71 billion

The world's largest network equipment maker Cisco (CSCO.O) said on Monday that it would acquire BroadSoft (BSFT.O), a US communications software company, for $ 1.71 billion. The deal will enhance Cisco's collaboration tools and help the company diversify beyond converters and routers.

BroadSoft shares closed up 1.67%, before Cisco made the company's $ 55 per share purchase price, compared with its last Friday's closing price premium of 2%.

Reuters August 30 has reported that BroadSoft is seeking to sell. The purchase price is more than 25% premium to the stock price before the report.

Cisco shares rose 0.3%.

"This is a wise acquisition that will drive Cisco's sales to its large-scale base user base over the next few years," said Daniel Ives, chief strategist at research firm GBH Insights.

The two companies said in a statement, including the debt included in the transaction valuation of 1.9 billion US dollars, is expected to complete the transaction in the first quarter of 2018.

After the deal is completed, BroadSoft employees will join Cisco's Unified Communications technology team.