Cisco still on spending spree
The networking equipment giant opens its wallet once again, this time to acquire digital subscriber line technology from Dagaz Technologies.
The networking giant opened its wallet once again to acquire DSL (digital subscriber line) technology from Dagaz Technologies, a division of Integrated Network Corporation, for about $108 million in cash and $16.5 million worth of stock.
The transaction is expected to close next month, with Cisco taking a one-time charge of 8 to 11 cents a share in its fiscal 1998 first quarter.
The acquisition of Dagaz's technology continues a trend by Cisco to invest in or acquire a wide range of technologies that facilitate high-speed access to the Internet and use of applications over a network. The DSL technology is expected to become a popular one for providing fast access using the existing telephone system.
Cisco will inherit two Dagaz hardware product lines--the Thurisa and the Jera--that offer carriers and Internet service providers a box that can zip DSL-based traffic across an ATM (asynchronous transfer mode)-based network link and another that condenses a variety of network traffic into a single line.
A recent study by the Pelorus Group, a market researcher, predicts the DSL market will grow into a $1.5 billion business by 2001 in the United States and $2.9 billion worldwide.
The Dagaz acquisition is Cisco's fifth of the year. About a month ago the company spent nearly $200 million to acquire Ardent Communications, a voice, video, and data hardware firm, and the Global Internet Software Group, makers of Internet firewall software.
The company has now acquired 19 companies since 1993.
The $16.5 million in stock included in the offer will go toward a stock option plan at Dagaz. The 30 employees at Dagaz will continue to be based out of New Jersey, but will eventually be moved to Cisco's Chelmsford, Massachusetts, campus.