SAN JOSE, Calif. -- June 29, 1999 -- Cisco Systems, Inc. today announced a definitive agreement to acquire privately-held StratumOne Communications, Inc. of Santa Clara, CA. StratumOne is a leading developer of highly integrated, high-performance semiconductor technology. This acquisition advances Cisco's New World strategy and provides the silicon technology necessary to enable service providers to build next-generation high-speed data networks with superior price/performance characteristics.
Under the terms of the agreement, between 6.31 and 7.72 million shares of Cisco common stock will be exchanged for all outstanding shares and options of StratumOne. Based upon Cisco's June 28, 1999 closing price of 61.9375, the stock exchanged would have a value of approximately $435 million. This acquisition will be accounted for as a pooling of interests and is expected to close in the first quarter of Cisco's fiscal year 2000. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements.
Cisco is acquiring StratumOne to equip service providers with high-end platforms to accelerate deployment of advanced New World services that integrate data, voice and video. Cisco and StratumOne have worked together to develop technology for the next generation of public networks capable of transporting data at 10 gigabits per second. StratumOne brings extensive experience in silicon integration to Cisco. This acquisition builds upon an existing relationship between the two companies that included a minority investment by Cisco in StratumOne in January 1999.
Complementing Cisco's five-phase optical internetworking plan to deliver data optimized New World networks, this acquisition brings innovative semiconductor technology to Cisco's families of high-end routers. StratumOne's technology combined with Cisco's New World solutions will give service providers a significant time-to-market advantage coupled with price/ performance leadership.
StratumOne was founded in 1997. The 78 employees led by StratumOne president and CEO Vijay Parikh will report to Graeme Fraser, Vice President and General Manager, Optical Internetworking Business Unit within the Service Provider line of business.
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