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Cisco to buy Qeyton for $800 mln

    Cisco Systems Inc. (Nasdaq: CSCO) said Friday it will buy Qeyton Systems for about $800 million in stock, its 11th purchase of the year.

    The purchase comes just as Cisco's stock is recovering from valuation concerns sparked by an article in Barron's. The article questioned the networking equipment maker's ability to keep up its rate of acquisitions. Cisco said it plans to acquire 20 to 25 companies this year, after snapping up 18 companies in 1999. The article said Cisco has increased its budget for acquisitions each year as its revenue and stock price have soared, and growth could suffer if revenue or its acquisition pace slows.

    The concern sent Cisco 's stock down, despite a third-quarter report which beat estimates.

    Shares closed Thursday at 60 1/4.

    Privately-held Qeyton Systems, based in Stockholm, Sweden, develops Metropolitan Dense Wave Division Multiplexing (MDWDM) technology which optimizes the performance and cost requirements of service providers' metropolitan networks.

    This acquisition is Cisco's second optical networking acquisition in Europe and underscores Cisco's commitment to building Internet scale, carrier-class, optical networks for the service provider market.

    Under the terms of the agreement, Cisco common stock worth about $800 million will be exchanged for all outstanding shares of Qeyton Systems.

    The deal will be accounted for under purchase accounting and is expected to close in the fourth quarter of Cisco's fiscal year 2000. In connection with the deal, Cisco expects a one-time charge of up to 5 cents a share for purchase in-process research and development.

    The 52 employees located in Stockholm will continue to operate in Stockholm and will be led by Claes Rickeby, the current CEO of Qeyton.