better and less expensive than starent. it's only logical. if it happens, you heard it here first.



Cisco had $35 billion in cash as of July 25, compared with
$10 billion in long term debt.

Much of the company's cash is held in its overseas
operations, however, and the Starent acquisition will
significantly deplete its warchest for further U.S.
acquisitions, CreditSights' Zhao said.

Cisco management said in a conference call on Tuesday that
it will continue to aggressively pursue acquisitions and it is
confident in its ability to tap the debt markets if needed to
finance purchases.

Meanwhile, Cisco's acquisition of Starent and video
conferencing company Tandberg, which was announced on Oct 1,
will boost its cash flows and may give the company more room to
pay down debt.

The acquisition of Starent should add around $250 million
in annual revenues to the company, Gimme Credit analyst Dave
Novosel said in a note.

"We believe the company can maintain leverage as it uses
its enormous free cash flow to reduce debt following these
transactions," he said.