[Waterloo, CANADA] Cisco Systems, Inc. will purchase privately-held PixStream Inc., a provider of hardware and software solutions to distribute and manage digital video across broadband networks.
This acquisition supports Cisco’s plan to accelerate broadband deployments and build networks that enable service providers to offer data, voice and video services to businesses and consumers.
Under the agreement, Cisco common stock worth approximately US $369 million will be exchanged for all outstanding shares and options of PixStream. This acquisition will be accounted for as a purchase and is expected to be complete in the first quarter of Cisco’s fiscal year 2001. The deal has been approved by the board of directors of each company and is subject to closing conditions.
Video is expected to account for a growing percentage of traffic on the Internet, and the acquisition of PixStream is a step in Cisco’s plan to increase broadcast-quality video delivery over broadband networks.
Cisco is the number-one market leader in broadband cable systems and the number-two market leader in broadband DSL systems. PixStream’s technology allows cable, DSL and wireless providers to deliver a single solution for broadband video services. Cisco wants to let its customers provide IP-based entertainment services such as broadcast-quality TV, video-on-demand programming and multi-player games over broadband DSL, cable and wireless networks.
PixStream was founded in 1996. Its 156 employees will report into Cisco’s Service Provider Business unit.