Cisco is ploughing forward in the telecommunications market, with the acquisition last week of another DSL (Digital Subscriber Line) company.
The networking giant, famed for its acquisitive tactics, bought Dagaz Technologies, the DSL division of US firm Integrated Network Corporation (INC), for $124.5 million (#75 million). In March this year the company bought Telesend, another DSL specialist.
DSL is a technology that allows telephone companies to offer Internet access from central office switches. This latest acquisition emphasises Cisco's push into the telco market, as it tries to attract major phone companies as customers. Cisco claimed ISPs will be interested in Dagaz's two key product lines, Thurisa and Jera, which are supposed to offer a cheaper way of managing bandwidth demand.
"We believe Cisco's end-to-end solution, with additional NEBS-compliant xDSL, offers great potential," said Joe Zell, president of US West !nterprise.
"Subscriber link technology, underscored by today's news, will help US West fuel the market acceptance of new xDSL services resulting in market acceleration."
Dagaz makes concentrators and access multiplexers which reduce congestion on ATM networks. The main customers for its products are telecoms carriers and ISPs. INC spun off the company at the beginning of the year and has been looking for a buyer since then.
The deal is expected to be finalised later this month. Under the terms of the agreement, Cisco will pay $108 million in cash and $16.5 million in stock options. The company will take a one-off charge for costs related to the deal in its fiscal first quarter of 1998. Dagaz's 30 employees are all expected to move to Cisco.
The acquisition of Dagaz is Cisco's nineteenth since 1993, and its fifth this year.
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