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Cisco To Acquire PipeLinks

Cisco Systems Inc. Wednesday acquired router maker PipeLinks Inc. for $126 million in stock in a deal that will move Cisco and its Internet provider customers further into the voice-over-IP market.

PipeLinks makes a variety of routers that are capable of simultaneously transporting circuit-based and IP traffic. The deal builds on a relationship began in 1997 when Cisco took a minority investment in the company.

Cisco said the acquisition will allow Internet providers to embrace new technologies, such as Internet telephony, while keeping their existing sychronous optical network and synchronous digital hierarchy equipment.

"This acquisition is intended to enable Cisco's service provider customers...to offer integrated network services for data and voice at the edge of the network," the company said.

"This technology is expected to allow service providers to offer new services, such as managed Internet access and native LAN services over their existing infrastructure. In addition, service providers will be able to continue to offer existing services like leased line and voice transport more effectively."

To finance the acquisition, Cisco plans to take a one-time charge of between 3 and 6 cents in its fiscal second quarter.