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Cisco has a long history adding on bolt-on like acquisitions and these two cyber security companies are potentially attractive targets according to Foolish contributor Leo Sun:

Networking equipment giant Cisco (NASDAQ:CSCO) generates nearly half of its revenue from routers and switches -- two highly commoditized, slow growth markets. Its routing revenue fell 4% last year as its switching revenue stayed flat. IDC also reports that Cisco is losing market share in both markets to aggressive rivals like Huawei.

In response, Cisco has been investing heavily in higher growth businesses like service provider video, collaboration, and security solutions. Security is the fastest growing business of the three, posting 13% annual sales growth last quarter and accounting for 4% of Cisco's top line.

Over the past few years, Cisco beefed up that business by acquiring security companies like threat protection firms ThreatGRID, SourceFire, OpenDNS, and Lancope. But looking ahead, many analysts expect Cisco to dip into its free cash flow ($12.4 billion over the past 12 months) and make additional purchases across the cybersecurity sector. Let's take a closer look at the two most likely targets.


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