Cisco has continued its acquisitive foray into the high speed remote access market, with plans to buy Netspeed, a Digital Subscriber Line (DSL) equipment manufacturer.
Netspeed provides high speed Internet access and data transmission via existing copper telephone lines. Cisco said in a statement that the Netspeed product suite adds central office products and broadband remote access to Cisco?s DSL portfolio, enabling them to offer telcos and Internet service providers an end-to-end solution.
The deal will be worth around $236 million, and will expand Cisco?s DSL product line following the acquisition of Dagaz from Integrated Networks last year. The company said that the purchase of a US company will complement the products acquired from the previous deal, which were mainly built to European and Asian carrier standards.
Analysts said the acquisition marks Cisco?s first significant move into the north American DSL technology arena.
?This is a reflection of the growing blur between IT and telecomms,? said Ovum analyst Kate Hewitt. ?All IT companies - particularly the big networking companies - are trying to get into the remote access market because it is becoming a very big business.?
The deal has been approved by the board of directors of both companies and is expected to be completed by April, subject to conditions. Cisco expects a one-off charge of between $0.13 and $0.18 per share for research and development expenses in its 1998 Q3 results, in connection with the buy. All of Netspeeds?s 140 employees will continue to work in their Austin, Texas location.
Cisco's business partners were summoned to endorse the deal. ?The acquisition will enable US West to accelerate the deployment of DSL services,? said Joe Zell, president of the US telco.
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