Belkin Acquires Cisco’s Home Networking Business Unit, Linksys Brand
Belkin, a private company based in Playa Vista, Calif., with operations and sales in more than 100 countries, intends to maintain the Linksys brand and will offer support for Linksys products as part of this transaction. Linksys’ main office is located in Irvine, Calif. 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. Despite being a brand that consumers can also purchase directly, Linksys has held the top market position for routers in the custom installation space for years, garnering a 48-percent marketshare of the CE Pro 100 in the 2012 Brand Analysis Study.
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, according to a statement from Belkin, which adds that the companies plan to “develop the next generation of home networking technology.”
Chet Pipkin, CEO of Belkin, says the two companies share similar beginnings and a passion for serving customers. “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,” he says.
“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 says.
Discussing distribution strategy, he says, ”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. Additionally, Linksys will enhance Belkin’s capabilities to meet the needs of the service provider space and small business users.”
Hilton Romanski, vice president corporate business development, Cisco, says he is “pleased about this strategic relationship with Belkin to build on Linksys’ position of strength.”
Pipkin concludes, “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.