What Might Be Cisco Systems, Inc. (CSCO)’s Next Move

Whom Cisco Might Buy

It’s far more likely at this point that Cisco would be a buyer, not a seller of assets. The sale of Linksys to Belkin last month cleared the decks for another move at the high-end market. It could make a run at privately held Zayo Group, which bought AboveNet last year.

A better option might be Fortinet, Inc. (NASDAQ:FTNT), whose network security offerings could prove a good fit with Cisco.

Fortinet’s estimates are being raised right now and it’s considered a hot stock, following a bump of 30% in profit announced last week. That view is not unanimous, however, which provides an acquirer with opportunity.

Fortinet is something of a family company, with Ken Xie as CEO and brother Michael Xie as CTO. Ken previously sold a company called NetScreen to Juniper Networks, Inc. (NYSE:JNPR), so it’s not a “family” business in terms of family having an emotional bond to it. Cisco is also looking for young executive talent – CEO John Chambers is 65 – and the brothers Xie fit the bill there, too. A 30% premium and some big jobs for the Xie boys might be just the ticket to rekindle Cisco as an interesting investment.

I’m guessing this might be the next big deal. Just know that the next big deal will not be the last.

The article What Might Be Cisco’s Next Move originally appeared on Fool.com and is written by Dana Blankenhorn.

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