US networking equipment vendor Cisco Systems Inc (NASDAQ:CSCO) has tasked Barclays Plc (LON:BARC) with finding a buyer for its home router unit Linksys, knowledgeable sources have informed Bloomberg.
According to the report, Cisco is likely to collect significantly less than the amount it spent on buying the business in 2003. The acquisition set the US company back by USD500m (EUR380m). But Linksys is a low-margin, mature consumer business, making it unlikely that Cisco will recoup its initial investment, the sources said. They added that the division could draw interest from TV manufacturers willing to spend some money on a well-known brand and technology.
Bloomberg said that Cisco was looking to dispose of Linksys as part of a strategic decision to shed consumer operations and focus on enterprise software and technology services. The pursuit of this agenda resulted in the closure of the Flip video camera business and the company let go of 7,800 workers in the past year, the news agency added.
Cisco spokeswoman Karen Tillman and Barclays spokesman Marc Hazelton would not comment to Bloomberg.