Cisco Systems Inc. resumed its torrid
buying spree Friday by grabbing content switch provider ArrowPoint
Communications Inc. in a stock deal worth about $5.7 billion.
Cisco will exchange 2.1218 shares of Cisco common stock for every
outstanding share and option of ArrowPoint Communications. The acquisition
is expected to be completed in Cisco’s fiscal fourth quarter.
The purchase of ArrowPoint should fit nicely for Cisco (CSCO), which has been snatching up optical Net infrastructure firms in the past
year in the hopes of gearing up its “New World” strategy of offering clients
better content networking solutions. ArrowPoint is a leading provider of
content switches that optimize the delivery of Web content.
Together with Cisco’s infrastructure, ArrowPoint’s products will enable
ISPs, Web hosting companies and other customers to boost Web speed.
ArrowPoint’s software and hardware-based architecture support URL- (Uniform
Resource Locator) and cookie-based switching. ArrowPoint’s products also
complement the Cisco Catalyst family of high multilayer switching products
that are deployed in the enterprise and service provider environments.
The 337 employees will be led by ArrowPoint Chief Executive Officer Cheng Wu
and will join the Public Carrier IP Group in Cisco’s service provider line
of business led by Senior Vice President Kevin Kennedy.
The latest acquisition continues the torrid pace for Cisco and its prime competitors, Lucent Technologies (LU)
and Nortel Networks (NT).
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 Nortel Networks (SBC).
