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Cisco Systems Grabs Optical Networking Firm

Cisco Systems grabbed up another optical networking firm Friday, purchasing privately-held Qeyton Systems of Sweden for $800 million in stock.

The deal, expected to close in the fourth quarter of this year, marks the second Friday in a row that Cisco has grabbed a technology firm amid its optical networking expansion. Last Friday, Cisco bought domestic content switch provider ArrowPoint Communications Inc. for $5.7 billion in stock.

Qeyton develops Metropolitan Dense Wave Division Multiplexing (MDWDM) technology to optimize the performance and cost requirements of networks. DWDM uses multiple colors of light to increase the capacity of fiber networks carrying a combination of phone, Internet, and video traffic.

Cisco made the play to boost its optical networking capabilities for metroploitan networks. Qeyton's DWDM technology links carriers points of presence (POPs) and customer sites with an optical ring and enables Cisco to offer service providers increased capacity without needing to add or lease new fiber in the metropolitan areas.

The 52 employees located in Stockholm will continue to operate in Stockholm and will be led by Claes Rickeby, the current chief executive officer of Qeyton, and will report to Geraint Anderson, vice president and general manager of Cisco's photonics business unit.

Qeyton Systems optical technology will be bundled with optical products and technology in Cisco's Optical Networking Solutions (ONS) 15000 family of products and will become part of Cisco's current optical networking group, within the service provider line of business.

The latest acquisition continues the torrid pace for Cisco and its prime competitors, Lucent Technologies and Nortel Networks .

The past year has seen the three companies purchase a number of product, networking and communications firms in an attempt to vault ahead of the competition. Cisco most recently purchased Isreal-based product supplier Pentacom for $118 million. Two weeks after that acquisition, Cisco catapulted itself in the telecommunications sector by inking a mulitbillion dollar equipment alliance with SBC Communications .