The acquisition continues a string of moves by Cisco to gain what it needs to tie its expertise in Internet-based equipment to traditional phone networks. The company is increasing looking to sell its technology to telecommunications customers bent on upgrading their networks to Internet standards in order to unify their disparate layouts.
TransMedia, a start-up founded last year with 66 employees, makes technology that can bridge multiple types of networks, including the public phone network and those layouts based on the Internet protocol (IP) or asynchronous transfer mode (ATM).
The deal has already been approved by the boards of both companies and is expected to close in the first quarter of Cisco's fiscal year 2000.
TransMedia is currently in testing its equipment with four communications carriers, including Frontier.
TransMedia's employees, including chief Gwong-Yih Lee, will join Cisco's multiservice-switching business unit.
Separately, Cisco announced an expansion of a network equipment purchasing agreement it has with Qwest Communications based on that company's hostile bids for US West and Frontier. The deal could be worth $1 billion in sales for Cisco over the next five years, according to the company.