Cisco will receive all outstanding shares and options of Class Data, which makes software for policy networking, with an architecture that gives users the ability to classify and prioritize network data traffic.
As a result of the acquisition, Cisco expects a one-time charge against after-tax earnings during the fourth fiscal quarter of 1998 of between 2 cents and 4 cents per share for purchased in-process research and development expenses.
The acquisition is expected to be completed by the beginning of June and is subject to certain closing conditions.
Class Data has 34 employees and was founded in 1996. The company's engineering team will remain in Israel and will become part of Cisco's enterprise division. Arad Naveh, Class Data's president and chief executive, as well as his marketing team, will be located in San Jose.
Cisco said the acquisition enhances the recently announced CiscoAssure Policy Networking initiative and will enable it to offer quality of service as an end-to-end network solution.
The deal represents Cisco's first acquisition of an Israeli company.