Cisco Systems announced at CTI Expo, in California last week that it will acquire PipeLinks, a developer of Synchronous Optical Network (SONet)/Synchronous Digital Hierarchy (SDH) routers that can simultaneously transport circuit-based and IP traffic.
PipeLinks' SONet/SDH router allows service providers to offer integrated voice and data services at the edge of the network. The router will use Cisco's Internetwork Operating System software as a foundation and will enable the delivery of services such as managed Internet access and native LAN services.
The acquisition is part of Cisco's end-to-end optical internetworking strategy, according to company officials. Cisco has been a minority investor in PipeLinks since 1997.
Under the terms of the acquisition agreement, shares of Cisco common stock -- with an aggregate value of about $126 million -- will be exchanged for all outstanding shares and options of PipeLinks not yet owned by Cisco.
Cisco expects a one-time charge against after-tax earnings between 0.03 cents and 0.06 cents per share for purchased in-process research and development expenses in the second quarter of fiscal year 1999.
The completion of the acquisition is still subject to approval by the boards of directors of each company.