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Cisco to Acquire ExiO Communications

In a move intended to expand its position in the wireless technology market, Cisco Systems Inc. Thursday released plans to acquire ExiO Communications Inc. in a deal valued at $155 million.

Under the terms of the agreement, Cisco common stock will be exchanged for all outstanding shares and options of ExiO. This acquisition is expected to be complete in the third quarter of Cisco's fiscal year 2001.

The acquisition of ExiO -- a developer of in-building, wireless technologies for corporate networks based on standard, Code Division Multiple Access (CDMA) technologies -- strengthens Cisco's commitment to the development of a fully converged network. The network is intended to support multiple wireless standards, including GSM and CDMA, for integrated mobile voice and data services, according to the company.

"The merging of the CDMA and the GSM standards allows users to have access to on- and off-campus networks," explained Robyn Jenkins, spokesperson for Cisco. "This is traditionally more cost-effective for the corporate environment.

"The acquisition of ExiO additionally complements our purchase of JetCell last May. JetCell provides converged VoIP via GSM while ExiO works with the CDMA standard," she noted. "This enhances the solution for GSM with CDMA technology."

Additionally, ExiO's wireless telephony solutions build on Cisco's existing wireless technology that enables enterprise customers to add the convenience of mobility to VoIP.

In connection with the acquisition, Cisco expects a one-time charge of approximately $.01 per share on an after-tax basis for purchased in-process research and development expenses. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions.

The Mobile Wireless Internet is expected to be a large and fast growing market, serving more than one billion subscribers by 2004.