Cisco Systems to Acquire NetSpeed Inc.
Products Expand Digital Subscriber Line Offerings
SAN JOSE, Calif. -- March 10, 1998 -- Cisco Systems, Inc. today announced
it has signed a definitive agreement to acquire privately-held NetSpeed
Inc. of Austin, Texas. NetSpeed is a market leader in Digital Subscriber
Line (DSL) technology in North America. Its networking product suite
provides high-speed Internet access and data transmission using existing
copper phone lines.
Under the terms of the acquisition, between 3.7 and 4.0 million shares of
Cisco common stock (subject to certain adjustments) will be exchanged for
all outstanding shares and options of NetSpeed. Based upon Cisco's March 9
closing price of $61.22, the stock exchanged would have a value of
approximately $236 million. In connection with the acquisition, Cisco
expects a one-time charge against after-tax earnings of between $.13 and
$.18 per share for purchased-in-process research and development expenses
in the third quarter of fiscal 1998. The acquisition has been approved by
the board of directors of each company and is expected to be completed by
April subject to various closing conditions, including, approval under the
Hart-Scott Rodino Antitrust Improvements Act.
Cisco Expands DSL Product Line; Will Offer Complete End-to-End Solution
NetSpeed's product suite adds customer premise equipment, central office
products and broadband remote access to Cisco's DSL product portfolio. Its
DSL products are deployed in production carrier networks including
Cincinnati Bell, Telus and US WEST. NetSpeed's DSL product line for North
America complements Cisco's 1997 acquisition of DSL solutions from the Dagaz
business of Integrated Network Corporation targeted at international markets.
DSL technology offers high-speed information transmission over existing
phone lines enabling a new class of high-bandwidth applications like
telecommuting, telemedicine, distance learning and downloading
graphic-intense web pages. NetSpeed's expertise in DSL technology enables
Cisco to offer telephone companies and other service providers an
end-to-end DSL solution leveraging their existing infrastructure to
accelerate integrated data, voice and video services to the home at
affordable service rates. NetSpeed's solutions feature low-cost customer
premise modems with a splitterless solution enabling "plug and play" and
cost effective service provisioning.
"Cisco's acquisition of NetSpeed will enable US WEST to accelerate the
deployment of DSL services," said Joe Zell, president of US WEST.
"Together with Cisco as a strategic partner in our broadband strategy
solution, we are confident the challenges of growing this new market can be
met in record time with our combined strengths."
NetSpeed is a leader in standards-based DSL technology. Its central office
products are carrier class telecommunications equipment supporting the
North American Equipment Building System (NEBS) requirements.
NetSpeed was founded in 1996. The approximately 140 employees will
continue to work in Austin, Texas. John McHale, NetSpeed president and
CEO, and his team will become part of the Network-to-User Business Unit
headed by Vice President and General Manager Kevin Kennedy within Cisco's
Service Provider line of business.
About Cisco Systems
Cisco Systems (NASDAQ:CSCO) is the worldwide leader in networking for the
Internet. News and information are available at cisco.com.
# # #
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This release may contain forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future
events or results. Readers are referred to the documents filed by Cisco
with the SEC, specifically the most recent reports on Form 10-K and 10-Q,
which identify important risk factors that could cause actual results to
differ from those contained in the forward-looking statements, including
potential fluctuations in quarterly results, dependence on new product
development, rapid technological and market change, acquisition strategy,
manufacturing risks, risks associated with the Internet infrastructure,
volatility of stock price, financial risk management and future growth
subject to risks.
________________________________________________________
Tripp Purvis
Channel Manager
Cisco Systems Inc.
South Florida Region
3660 Maguire Road
Suite 200
Orlando, FL 32803
Phone: 407-897-8721
FAX: 407-897-8799
Pager: 800-365-4578
Cell: 407-421-8663
Email: tpurvis@cisco.com cisco.com
Technical Assistance Center: 800-553-2447
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