1. What did Belkin announce today?
Today, Belkin announced that we have entered into an agreement to acquire Cisco’s Home Networking Business Unit, including the Linksys products, technology, brand and talented employees.
2. Why is Belkin acquiring Linksys?
Belkin’s goal is to be the global leader in the connected home and wireless networking space. This acquisition is an important step to realizing that vision. Linksys pioneered wireless connectivity capability around the globe. Its strong brand is well known for its premium market position and proven dependability that gives users peace of mind in their home and in the small business networking environment. Belkin has great insight into consumer needs and how to meet those needs. We intend to use that understanding to grow and expand Linksys’ premium brand and market presence. With complementary innovation and engineering strategies in the combined organization, we will be able to create great opportunities for consumers, distribution partners and resellers, and will have the strongest retail presence in the U.S. networking marketplace.
3. Why is Cisco divesting Linksys?
As Cisco realigns its business along its five strategic priorities, it has decided to exit the home router direct-to-consumer business. In terms of timing, Linksys has seen its business and margin profile substantially improve over the past year. Cisco has found a strategic buyer in Belkin in the retail channel and a relationship that will continue to extend the reach of Cisco’s video and service provider solutions into the home. Additionally, this relationship will augment Linksys solutions and services, adding to Linksys’ distinctive technology, including Smart Wi-Fi. This transaction supports Cisco’s commitment to ensuring the long-term success of Linksys, its partners and customers, along with finding a buyer with a strong track record in the retail business and beyond. The Linksys brand will be well-positioned to take advantage of attractive end markets where broadband penetration and high bandwidth applications, such as video, drive demand for home networking products and solutions.
4. When will the Linksys transaction close?
The transaction is anticipated to close in March 2013.
5. Will there be any strategic relationship between Belkin and Cisco?
Belkin and Cisco intend to enter into a strategic relationship focused on a variety of initiatives including retail distribution, strategic marketing and products for the service provider market.
6. What are the financial terms of this acquisition
Belkin is a privately held company and specific financial details of this transaction will not be disclosed.
7. Will both brands continue to be available in the marketplace?
We intend to maintain and promote the Belkin and Linksys brands in the marketplace, emphasizing the distinctive consumer offerings of the combined businesses. Linksys pioneered wireless networking and is well known for its premium market position and proven dependability that gives users peace of mind in their home and in the small business networking environment. It is Belkin’s intention to honor the heritage of the Linksys brand and premium market positioning. Having both brands in Belkin’s portfolio allows Belkin to address a broader range of consumers with distinct networking solutions. Our vision is to be the global leader in the connected home and wireless networking space. This acquisition is an important step to realizing that vision.
8. How does this benefit consumers?
Consumers around the world are increasingly embracing tablets, smartphones and new ways of consuming media that require a stronger wireless networking infrastructure. This is creating a new and growing category of wirelessly networked products and services to address the connected home market. Belkin’s WeMo platform and NetCam Wi-Fi-based cameras, in combination with a strong Wi-Fi router network, are examples of how Belkin is creating new ways for mobile consumers to keep in touch with their homes and loved ones from their mobile devices. Combining Belkin’s heritage in personalization, protection and connectivity for mobile devices with Linksys’ history in networking will further enable Belkin to create new and even more innovative products that handle the needs of even the most demanding online households and small businesses.
Together, Belkin and Linksys will make it easier for people to identify and buy what they need.
9. How will customers with Linksys products receive customer support?
For service, Linksys customers should go to the support page on Linksys’ website. For Belkin service, customers should visit Belkin’s website.
10. What happens to my Linksys product warranties?
All valid warranties for current and future Linksys products will be honored.
11. How will this acquisition affect Linksys’s employees and leadership?
Belkin plans to fully integrate Linksys into its overall organization, and there will likely be consolidation of positions as we recognize efficiencies between the two organizations. For the time being, Linksys will operate business as usual.