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Cisco to buy Swedish optical networking firm

The network equipment giant says it has agreed to acquire Sweden's Qeyton Systems in a stock deal valued at $800 million.

Network equipment giant Cisco Systems today said it has agreed to acquire Sweden's Qeyton Systems, a maker of optical networking equipment, in a stock deal valued at $800 million.

The acquisition of Qeyton helps expand Cisco's capabilities in the area of optical networking equipment, the companies said in a statement. Qeyton makes specialized networking products that increase the capacity of fiber networks carrying a combination of phone, Internet and video data, primarily for use with service providers' large and complex metropolitan networks.

This marks the latest acquisition in Cisco's ongoing shopping spree for networking gear intended to handle the convergence of voice, video and data traffic.

The company recently scooped up several companies, including ArrowPoint Communications last Friday in a stock deal worth $5.7 billion. ArrowPoint, based in Acton, Mass., produces switches that are designed to make the delivery of Web content more efficient.

Under terms of the Qeyton buy, Cisco stock, valued at about $800 million, will be exchanged for all of Qeyton's outstanding shares. Related to the acquisition charges, Cisco said it expects to report a one-time charge against after-tax earnings of up to 5 cents a share.

Qeyton's optical equipment products will be folded into Cisco's optical networking product line. Qeyton, which was founded in 1998, currently has 52 employees located in Stockholm and will continue to operate there, led by Qeyton chief executive Claes Rickeby.

The deal, which has been approved by Cisco's board and a majority of Qeyton's shareholders, is subject to customary closing conditions and regulatory approval. The acquisition is projected to close in the fourth quarter of 2000, the companies said.