Cisco Buys Optical Outfit

BOSTON (05/17/2000) - Cisco Systems Inc. late last week announced the acquisition of privately held Qeyton Systems, which makes DWDM MANs, for $800 million.

Qeyton, in Stockholm, Sweden, expands Cisco's optical networking capabilities to include dense wave division multiplexing metropolitan-area networks. Cisco acquired long haul DWDM capabilities with the purchase of Pirelli Optical Systems late last year.

DWDM enables service providers to increase the capacity of their fiber-optic networks without needing to add or lease new fiber in the metropolitan areas.

Qeyton's metro DWDM technology links carriers' points of presence and customer sites with an optical ring.

Qeyton's optical technology will be integrated with Cisco's other optical products, like the Pirelli gear and the company's ONS 15000 line. This line also includes optical products from Cisco's acquisitions of Cerent, Monterey and Pipelinks.

Qeyton was founded in 1998. The company's 52 employees will continue to operate in Stockholm and will be led by Claes Rickeby , Qeyton's current CEO. Rickeby will report into Geraint Anderson, vice president and general manager of Cisco's photonics business unit.

Under the terms of the agreement, Cisco common stock will be exchanged for all outstanding shares of Qeyton. In connection with the acquisition, Cisco expects a one-time write off up to 4 cents per share for purchased in-process research and development expenses.

The board of directors of Cisco and a majority of Qeyton's shareholders have approved the acquisition, which is expected to close in the fourth quarter of Cisco's 2000 fiscal year.

The transaction is subject to various closing conditions including approval under the Hart Scott Rodino Antitrust Improvements Act.

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