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Cisco to Buy Netiverse for $210 Million

July 08, 2000|From Bloomberg News

SAN JOSE — Cisco Systems Inc., the world's largest maker of computer-networking equipment, agreed to buy closely held Netiverse Inc. for about $210 million in stock to gain technology that speeds network connections.

The transaction is expected to close in Cisco's first quarter, which ends in October. Cisco already owns 20% of the company.

Cisco wants to better compete in the Web-traffic management market, which it has said should rise to $2 billion by 2003 from $500 million this year. Last month, it acquired ArrowPoint Communications Inc. for about $4.7 billion in stock. ArrowPoint's switches route requests for Web content or online transactions to the computer best able to handle the request.

The Netiverse acquisition would allow Cisco to offer additional capabilities for distributing Internet content and managing large amounts of Web traffic, Cisco said.

Cisco would take a charge of as much as 2 cents a share for the research and development it would be acquiring as well as for development expenses. The company is expected to earn 16 cents, the average estimate of analysts polled by First Call/Thomson Financial.

This would be the 13th acquisition that Cisco has made this year, said spokeswoman Jeanette Gibson. The company has said it wants to buy 25 companies in 2000.

San Jose-based Netiverse would be part of Cisco's Workgroup Business Unit. It was founded last year and has 34 employees. Gururaj Singh is its chief executive.

Shares of Cisco, also based in San Jose, closed up 63 cents at $65.38 on Nasdaq.

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