Cisco Systems will buy Netiverse, a web content acceleration switch maker, in a stock deal the companies announced on Friday.
Cisco will trade $US210 million of its common stock for all of Netiverse's outstanding shares and options. The sale is expected to be completed by Cisco's first business quarter of 2001. Cisco currently holds a 20 per cent stake in the 11-month-old company.
Netiverse's technology appears to complement the technology Cisco gained in the $5.7 billion purchase announced in May of switch maker ArrowPoint Communications, said Alex Benik, a data communications analyst from Yankee Group. Both Netiverse and ArrowPoint develop web switches, devices which help distribute and manage internet traffic.
"It sounds like typical Cisco, going out and acquiring technology and integrating it into their products," Benik said. "This is a fairly low price tag for Cisco. I imagine that this is a technology acquisition, not a product acquisition."
Cisco expects a one-time write off of up to 2 cents per share for research and development expenses in connection with the purchase. Each company's board of directors have approved the deal, which is subject to various closing conditions.
As is Cisco, Netiverse is based in San Jose, California, and received venture capital backing from Sequoia Venture Capital. Netiverse's 34 employees will join Cisco's Workgroup Business Unit.