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Cisco in Deal to Acquire OpenDNS for $635 Million

Cisco's first deal since naming Chuck Robbins as incoming CEO.

Networking giant Cisco Systems said it will acquire OpenDNS, a Web security company in which it had invested, for $635 million.

OpenDNS is probably best known for its free service that allows Web users to point their computers’ or routers’ Domain Name Service settings to its own network for the purpose of filtering content and preventing malware attacks. Founded in 2005, it attracted 65 million customers.

It has since expanded into services aimed at helping large companies protect their networks, delivering network security by way of a software-as-a-service subscription and combining its capabilities with those of other security companies like FireEye. Its customers include Netflix, the chip maker Nvidia and the energy company BP.

The deal marks an exit for CEO David Ulevitch, who started the company straight out of college. He raised about $51 million in three rounds from investors including Greylock, Sutter Hill Ventures, Sequoia Capital and Chris Sacca. The company has been cash flow positive since 2007.

Ulevitch and the rest of the OpenDNS team will be moved into Cisco’s Security business group, headed up by David Goeckeler. The deal is expected to close early next year.

The deal also marks the first significant acquisition for Cisco since it announced that Chuck Robbins will take over as CEO next month.

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