American information technology firm Cisco said it will acquire Meraki Inc., a leader in cloud networking, in a deal worth $1.2 billion.

Based in San Francisco, Meraki was founded by researchers at the Massachusetts Institute of Technology.

Cisco will pay about $1.2 billion in cash and retention-based incentives to acquire the entire business and operations of Meraki.

The deal is expected to be completed in the second quarter of Cisco's fiscal 2013, subject to customary closing conditions including regulatory review.