SAN JOSE, Calif., Feb. 16, 2000 -- Cisco Systems, Inc., today announced a definitive agreement to acquire privately-held Growth Networks Inc. of Mountain View, CA. Growth Networks is a market leader in Internet switching fabrics, a new category of networking silicon. This acquisition strengthens Cisco's New World strategy by expanding its ability to deliver terabit performance next-generation networking infrastructures to service providers.
Under the terms of the agreement, Cisco common stock worth an aggregate value of approximately $355 million will be exchanged for all outstanding shares, warrants and options of Growth Networks. This acquisition will be accounted for as a pooling of interests and is expected to close in the fourth 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 Act.
Cisco is acquiring Growth Networks to provide service providers with next-generation routing and switching infrastructures to enable them to deploy advanced systems with switching capacities that scale from 10's of gigabits per second (Gbps) to 10's of terabits per second (Tbps). As emerging technologies such as optical networking increase the carrying capacity of the network backbone, corresponding demand arises for products that can route and switch traffic at increasingly higher rates and capacities. This acquisition provides Cisco with scalable switching fabric technology and systems expertise to enable the development of the next-generation of switches and routers.
Growth Networks' Internet Switching Fabric is a new category of networking silicon that interconnects the input and output ports within high-end switches and routers. This technology will help create a foundation for next-generation networks and will enable service providers to meet critical requirements such as scalability, flexibility, multi-service support and quality of service.
Growth Networks' technology complements the earlier acquisition of StratumOne Communications. Both companies provide Cisco extensive expertise in semiconductor design and silicon integration.
Growth Networks was founded in 1998. The 53 employees will join Cisco's Public IP Carrier Systems Group within the Service Provider Line of Business.
