Two privately held California companies will join the fold at Cisco Systems following acquisition deals announced yesterday worth a total of more than $US500 million in stock.
Cisco has reached agreement to buy InfoGear Technology for $301 million worth of Cisco stock, Cisco said in a release. In a separate release yesterday, Cisco said it plans to buy JetCell, a company in which Cisco already holds a 10 percent stake.
Cisco currently holds an 8 percent stake in InfoGear, which makes Internet appliances and software used to manage information appliances. The acquisition fits into Cisco's strategy to deliver end-to-end solutions for service providers and other customers who want to deploy advanced data, voice and video services, the release said.
JetCell develops in-building wireless telephony products for corporate networks. Cisco will pay $200 million in stock for JetCell, whose products, currently in trials, give enterprise customers' employees the ability to use a standard cellular phone to access their corporate voice system and roam from their private corporate network and the public cellular network, Cisco said.
As part of the deal, Cisco expects to take a one-time charge against after-tax earnings of up to $0.03 per share, the company said. This charge does not reflect Cisco's two-for-one stock split, effective March 22.
The acquisitions have been approved by the boards of directors of Cisco and each of the companies, and the two deals are expected to close in the fourth quarter of Cisco's financial year, which ends July 29.