Cisco to buy TransMedia for $US407 million

Cisco Systems has signed a definitive agreement to buy TransMedia Communications, a privately-held company that makes IP (Internet protocol) gateways for third-generation networks.

The deal, worth about $US407 million, will help Cisco to offer migration from circuit-based networks to third-generation, packet-based networks to telecommunication carriers, the networking vendor said. Gateways transfer IP traffic from the PSTN (public switched telephone network) to the IP network and vice versa.

Between 3.15 million and 3.85 million shares of Cisco's common stock will be exchanged for outstanding shares and options of TransMedia, Cisco said. The respective boards of directors have approved the deal and although it is subject to various, unspecified closing conditions, the companies expect it to become final in the first quarter of Cisco's next fiscal year.

TransMedia, based in California, has 66 employees and its current chief executive officer Gwong-Yih Lee will now report to Brad Wurtz, vice president and general manager of Cisco's Multiservice-Switching Business Unit, officials said.

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