Fresh off the heels of Cisco Systems Inc.’s US$3.7 billion acquisition of AppDynamics Inc., one analyst is raising the prospect of more M&A for the US$150 billion technology company, which is making a push into the software business.

As with much of what’s happening in the market these days, the prospect of more deals for Cisco has something to do with Donald Trump.

Mitch Steves, a telecom and networking equipment analyst at RBC Capital Markets, noted that comments from the President’s administration point to an overseas cash repatriation holiday.

Cisco has US$69.4 billion of cash on its balance sheet, about 87 per cent of which (US$60.6 billion) is held overseas.

While the current tax rate to repatriate is approximately 35 per cent, a reduction to 10 per cent would equate to a big break for Cisco.

Steves noted that the company could repatriate US$39.4 billion by paying the current 35 per cent tax, but that number would climb to US$54.5 billion in a 10 per cent tax scenario.

The analyst believes this would accelerate Cisco’s M&A plans, with US$2 billion to US$5 billion in additional revenue, or support changes to its capital allocation strategy through three years of dividend support, or a 10 per cent share count reduction.

“With a higher likelihood of a tax holiday, we think Cisco’s cash balance could be unlocked, creating a one-time increase in stock price,” Steves said in a research note.

He noted that US$15.2 billion in cash is equal to about US$3 per share, or roughly 10 per cent of Cisco’s current share price of approximately US$30.