Double whammy for Cisco

Cisco Systems has announced its agreement to acquire Vovida, a communications software provider and supplier of networking protocols, and IPCell Technologies, a provider of software for broadband access networks combining Internet Protocol and telephony services, in a deal worth $369 million.

Cisco has stated that the acquisitions of Vovida Networks and IPCell Technologies will provide technologies that will help its partners and customers provide new data, voice and video services and support Cisco’s vision of a single, IP-based communications network.

Under the terms of the agreement, Cisco common stock worth a gross aggregate value of approximately $369 million will be exchanged for all outstanding shares and options of Vovida Networks and IPCell Technologies.

Cisco currently has a minority interest of 20.5 percent in Vovida Networks and 17.2 percent in IPCell Technologies.

These acquisitions will be accounted for as a purchase and are expected to be complete in the second quarter of Cisco’s 2001 fiscal year.

In connection with the acquisitions, Cisco expects a one-time charge for purchased in-process research and development expenses not to exceed $0.02 per share.

Cisco say these acquisitions will help decrease network costs and enable new revenue-producing applications for service providers by combining voice, video and data services over packet networks.

By accelerating the development of new applications for Voice Over IP networks, Cisco say that they and their partners seek to expand the solutions available for service providers.

The software solutions offered by Vovida Networks and IPCell Technologies are said to be complimentary to Cisco’s existing IOS software and will operate with Cisco voice gateways.