Cisco agrees to buy AppDynamics for $3.7 billion

San José, California-headquartered Cisco Systems Inc., the world's leading manufacturer of networking gear, has agreed to acquire fast-growing software maker AppDynamics Inc. for $3.7 billion.

Cisco snapped up AppDynamics just before it planned to go public. San Francisco-based AppDynamics was scheduled to debut its initial public offering (IPO) on Wednesday this week, marking this year's first major American technology IPO.

It is one the networking gear maker's largest deals in recent years as it seeks growth in areas outside of its core business. Since taking the helm in 2015, CEO Chuck Robbins has been trying to transform Cisco by providing customers with more flexible and customizable products in order to generate recurring income over time.

Corporate Strategy Chief Hilton Romanski said in a statement, "It is important for Cisco to have market-leading software in our portfolio to deliver on this journey that we've been on for some time. This asset is best in class. We believe this is one of the best teams out there to help us on our journey."

Following the transaction, which is expected to close by the end of April, AppDynamics will become a division in Cisco's IoT & Applications business.

Founded in 2008, San Francisco-based AppDynamics helps businesses track and learn how well their apps and websites are running so they could respond to issues like connection slowdowns and crashes.