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Cisco buys software start-up in $25 million deal

Cisco Systems says it has agreed to buy Tasmania Network Systems, a maker of content network caching software, in a stock deal worth $25 million.

Cisco Systems today said it has agreed to buy start-up Tasmania Network Systems in a stock deal worth $25 million.

Cisco said it will integrate Tasmania's content network caching software into its current Cache Engine 500 product line. Network caching speeds up content delivery and overall network performance by storing frequently accessed information, like Web pages, closer to the end user, which decreases download times.

Today's acquisition marks Cisco's latest buy after the company announced plans to accelerate its buying spree and make more than 20 purchases in the next year.

Under the terms of the agreement, Cisco said it will exchange its common stock worth $25 million for all outstanding shares, warrants, and options of Tasmania.

The networking giant said the acquisition will result in a one-time charge after taxes in its second quarter of fiscal year 2000.

San Jose, California-based Tasmania, founded this year, said its 16 employees will join Cisco's new content services business unit.

The acquisition has been approved by the boards of each company and is subject to approval by Tasmania shareholders, the companies said.