Cisco Systems Inc. plans to keep up the pace of acquisitions in 2010 and looks at 100 companies for every purchase it decides to make, said Charles Carmel, vice president of corporate development.

Cisco, which has acquired more than 130 companies in its 25-year history, has about 50 people exploring potential takeover candidates, Carmel, 35, said in an interview with Bloomberg Television.

“We usually look at about 100 companies for every 10 we get into any serious level of conversation, which turns into one deal at the end of that funnel,” Carmel said after a panel discussion at Bloomberg’s San Francisco bureau. “It’s a 1 percent flow-through, so obviously we have a lot of activity.”

Carmel has been a member of Cisco’s acquisition team since 2001. In that time, the world’s biggest maker of networking gear bought more than 70 companies, bolstering revenue by entering new markets such as set-top boxes and handheld video cameras. Cisco made one acquisition in the first five months of 2009. Starting in May, the San Jose, California-based company announced five acquisitions totaling more than $7 billion.

Cisco will continue that pace, Carmel said, given the company’s balance sheet. The company had $35.4 billion in cash and investments as of October.

“We plan to keep up an active pace as we go through 2010,” Carmel said. “Deal making always has more of an art form to it than a science, so it’s hard to predict numbers. But we certainly expect we will be active throughout the course of the year. 

Acquisition Targets 

Cisco rose 45 cents to $24.85 yesterday in Nasdaq Stock Market trading. The shares advanced 47 percent last year.

Carmel oversees Cisco’s acquisitions in markets such as consumer devices, software, security and wireless equipment. His purchases have contributed more than $5 billion to Cisco’s revenue since 2002, according to the company.

Carmel led the teams responsible for the purchases of Scientific-Atlanta Inc., the No. 2 maker of cable set-top boxes, in 2006; the 2007 purchase of WebEx Communications Inc., the largest provider of Web-based teleconferencing services; and last year’s acquisition of Pure Digital Technologies Inc., maker of the Flip Video camcorder.

“The first half of 2009 was the nuclear winter,” Carmel said. “When the volatility is so high, you need to wait for the volatility to settle. As we moved into the second half of the year, the world did start to settle and that was one of the driving factors to why Cisco really picked up its activity.”

source:businessweek