Cisco Systems Inc. Wednesday grabbed
privately-held Growth Networks
Inc. for $355 million in stock.
This acquisition will be accounted for as a pooling of interests and is
expected to close in the fourth quarter of
Cisco’s fiscal year 2000. Growth Networks’ 53 employees will join Cisco’s
public IP carrier systems group.
Growth Networks is a market leader in Internet switching fabrics, a new
category of networking silicon that interconnects the
input and output ports within high-end switches and routers. The purchase
strengthens Cisco’s (CSCO)
New World strategy by expanding its ability to deliver faster networking
infrastructures to service providers.
Because optical networking is snowballing in popularity, demand has risen
for products that can route and switch traffic at higher rates and
capacities. Cisco will now be a carrier of scalable switching fabric
technology and systems expertise to enable the development of the
next-generation of switches and routers.
This technology will help create a foundation for next-generation networks
and will enable service providers to meet critical requirements such as
scalability, flexibility, multi-service support and quality of service, the company said.
Growth Networks’ technology complements the earlier acquisition of
StratumOne Communications. Both companies provide Cisco extensive expertise
in semiconductor design and silicon integration.
Last week, Cisco announced a 49 percent increase in earnings and a 53
percent increase in sales. Positive investor reaction to the news vaulted
the networking firm past General Electric, making it the
second-most-valuable company in the country.
