BroadSoft, which had a market value of about $1.7 billion based on Friday's close, earlier attracted interest from buyout firms Searchlight Capital Partners and Siris Capital Group, people familiar with the matter said October 4.
Cisco Systems, the world's largest networking gear manufacturer, is nearing a deal to buy United States telecom software firm BroadSoft for close to US$2 billion (S$2.7 billion), a person familiar with the matter said on Sunday.
Gaithersburg, Maryland-based BroadSoft provides telecommunications technology for businesses, including phone services, audio and video conferencing and virtual meetings. Its flagship products include BroadWorks, an application platform hosted on-premises by service providers, and BroadCloud, its cloud-based platform for service providers "looking for an accelerated time-to-market with business ready services".
Cisco shares also rose about 1 percent.
"As businesses continue to move toward the cloud in search of simplicity and speed, joining Cisco will allow us to deliver best-in-class collaboration tools and services", said Tessler.
The deal is expected to close during the first quarter of 2018. Once the buyout is finished, BroadSoft employees will join Cisco's Unified Communications Technology Group, under the Applications Group.
After the $3.7 billion acquisition of privately held AppDynamics in March, this year, the new BroadSoft deal would be second major acquisition.
Broadsoft offers cloud-based communication solution that enable mobile, fixed-lines and other communication service providers to offer unified communications over network systems.
BroadSoft has existing partnerships with 450 telecom carriers in 80 countries - including 25 of the top 30 globally - and over 19 million small and medium-sized business subscribers, Rob Salvagno, VP of corporate business development at Cisco, wrote in a blog post.
BroadSoft has historically sold its products to large telecommunications companies such as Verizon Communications Inc and AT&T Inc, which then resell the software to their business customers.
BroadSoft was advised on the transaction by Jefferies Group and Qatalyst Partners, with legal advice from Cooley LLP.