Cisco Brings New World Capabilities to Traditional Carrier Environment
SAN JOSE, Calif. -- December 2, 1998 -- Cisco Systems, Inc. today announced it has signed a definitive agreement to acquire privately-held PipeLinks, Inc. of San Jose, CA. PipeLinks is a pioneer in SONET/SDH routers capable of simultaneously transporting circuit-based traffic and routing IP (Internet Protocol) traffic. Cisco has been a minority investor in PipeLinks since 1997.
Under the terms of the acquisition, shares of Cisco common stock with an aggregate value of approximately $126 million will be exchanged for all outstanding shares and options of PipeLinks currently not owned by Cisco. In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of between $.03 and $.06 per share for purchased in-process research and development expenses in the second quarter of fiscal 1999. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions.
This acquisition is intended to enable Cisco's service provider customers to transition to the New World while utilizing their existing SONET/SDH (synchronous optical network/synchronous digital hierarchy) infrastructure. PipeLinks' SONET/SDH router is a cost-effective, standards-based access device that combines traditional circuit-based traffic with IP traffic in a single device. This solution is intended to enable service providers to offer integrated network services for data and voice at the edge of the network.
Using Cisco's IOS. software as a foundation, this technology is expected to allow service providers to offer new services such as managed Internet access and native LAN services over an existing TDM infrastructure. In addition, service providers will be able to continue to offer existing services like leased line and voice transport more cost effectively. Using PipeLinks' technology, service providers will be able to target small and medium-sized businesses in multi-tenant building environments. With this acquisition, Cisco continues to build upon its end-to-end optical internetworking strategy.
PipeLinks was founded in 1996. The 73 employees led by PipeLinks president and CEO Amit Shah will report to Alex Mendez, vice president and general manager, in the Service Provider line of business.
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