Cisco to buy Selsius Systems

The networking giant moves to acquire privately held Selsius, a supplier of network PBX systems for telephony over IP networks, for $145 million.

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Networking giant Cisco Systems today announced it has moved to acquire privately held Selsius Systems, a supplier of network PBX systems for high-quality telephony over IP networks, in a stock and cash deal valued at $145 million.

Shares of Cisco barely reacted to the news of the acquisition, climbing less than half a percent to 50.88 on the news. The stock has traded as high as 70.17 and as low as 30.28 during the past 52 weeks.

Cisco is hoping that Selsius's technology will enable the company to accelerate the transition from conventional, proprietary circuit-switched PBXs to multiservice, open LAN systems capable of enabling the next step in data-voice integration.

The company said that the acquisition enhances its data/voice/video integration strategy by bringing open, standards-based technology to conventional PBX and telephone equipment. This technology will become an integral component in the fourth phase of Cisco's five-phase voice/data/video integration strategy, according to Cisco.

Under the terms of the acquisition, shares of Cisco common stock and cash worth $145 million will be exchanged for all outstanding shares and options of Selsius. In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of between 3 cents and 6 cents per share for purchased in-process research and development expenses in the second quarter of fiscal 1999.

The acquisition is subject to various closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act.

Cisco has lately seen increased pressure from regulators.

Just last month, Cisco found itself facing an inquiry from the Federal Trade Commission about concerns that it may have colluded with others to divide up a high-tech market. The networking giant denies any wrongdoing.

The 51 employees led by Selsius president and CEO David Tucker will become part of Cisco's Enterprise line of business headed by Senior Vice President Mario Mazzola.