SAN JOSE, Calif., July 27, 2000 - Cisco Systems, Inc., today announced a definitive agreement to acquire privately-held NuSpeed Internet Systems of Maple Grove, Minnesota. NuSpeed Internet Systems' technology connects storage area networks and Internet Protocol networks. With this strong foundation of storage area network expertise, Cisco will be able to offer its customers a solution to converge data and storage networks into one infrastructure.
Under the terms of the agreement, Cisco common stock worth an aggregate value of approximately $450 million will be exchanged for all outstanding shares and options of NuSpeed Internet Systems. This acquisition will be accounted for as a purchase and is expected to be completed in the first quarter of Cisco's fiscal year 2001. In connection with the acquisition, Cisco expects a one-time write off of up to $.03 per share for purchased in-process research and development expenses. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions.
With the explosion of the Internet Economy, storage area networks have become vital for companies to store and quickly retrieve data on demand, as well as back up their systems. NuSpeed Internet Systems enhances Cisco's storage area network strategy by creating new applications for customers on IP networks and is part of Cisco's continued effort to drive an open, standards-based model to address customer's end-to-end requirements.
NuSpeed Internet Systems technology will be implemented in Cisco solutions to interconnect storage area networks with metropolitan area networks (MANs), wide area networks (WANs) and local area networks (LANs). NuSpeed Internet Systems is a leading company in implementing the iSCSI protocol that provides a way for the two disparate networks to communicate. Customers benefit by managing a single, common network infrastructure as opposed to two separate and distinct environments.
NuSpeed Internet Systems was founded in 1999. The 56 employees will be led by NuSpeed Internet Systems CEO Mark Cree and will operate in the Enterprise Line of Business led by Senior Vice President James Richardson.