SAN JOSE, Calif., May 5, 2000 -- Cisco Systems, Inc., today announced a definitive agreement to acquire publicly traded ArrowPoint Communications, Inc. (NASDAQ: ARPT) of Acton, Massachusetts. ArrowPoint Communications is a leading provider of content switches that optimize the delivery of web content. This acquisition underscores Cisco's New World strategy to offer its customers a broad portfolio of content networking solutions to meet the growing demands for web content. Coupled with Cisco's Internet infrastructure, ArrowPoint's products will provide a new level of intelligence that will enable ISPs, Web hosting companies and other customers to create a faster, more reliable Web experience. In addition, ArrowPoint's solutions strengthen Cisco's presence in emerging markets that include ASPs (Application Service Provider), AIPs (Application Infrastructure Provider) and "dot com" companies.
Under the terms of the agreement, Cisco will exchange 2.1218 shares of Cisco common stock for every outstanding share and option of ArrowPoint Communications. Based on the closing price of $63 5/8 on May 4, 2000, this exchange ratio values the transaction at approximately $5.7 billion. This acquisition will be accounted for as a pooling of interests and is expected to be completed 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 and by the shareholders of ArrowPoint Communications.
Cisco is acquiring ArrowPoint to provide its customers with a feature-rich, flexible content switching platform. ArrowPoint's unique software and hardware-based architecture enable it to support a full set of content-aware features such as URL- (Uniform Resource Locator) and cookie-based switching. These features allow ArrowPoint to deliver a new level of network services that can direct traffic based on information such as the content being requested and the frequency of the content request.
ArrowPoint's leading software capabilities can also be integrated with existing Cisco products to meet the evolving needs of Cisco customers. ArrowPoint's products also complement the Cisco Catalyst family of high performance multilayer switching products that are deployed in the enterprise and service provider environments.
ArrowPoint Communications was founded in 1997. The 337 employees will be led by ArrowPoint CEO Cheng Wu and will join the Public Carrier IP Group in Cisco's Service Provider Line of Business led by Senior Vice President Kevin Kennedy.
