Cisco Goes Mobile

Cisco Systems Inc. continued its recent spate of acquisitions Tuesday with an agreement to buy wireless software maker IPMobile Inc. for $425 million in stock.

IPMobile specializes in third-generation networks, which Cisco believes will lead to new and innovative wireless data and voice services such as the convergence of Internet-related data services and mobile wireless services. IPMobile is also a developer of IP Radio Access Networks (IP-RAN) which will connect wireless base stations to the Internet in next-generation networks. RANs control and manage the radio networks between user devices and base stations while providing access to data and voice services.

The deal is the 16th announced by Cisco to date this year, and the third in a week. Last Tuesday, the company snapped up voice-over-IP device provider Komodo Technology Inc. for $175 million in stock. And last Thursday, Cisco grabbed NuSpeed Internet Systems, maker of storage area networks, for $450 million in stock. Cisco said its goal is 20 to 25 acquisitions by year-end.

Cisco will exchange common stock worth an aggregate value of $425 million for all outstanding shares and options of IPMobile. The acquisition has been approved by the boards of directors of both companies. The acquisition will be accounted as a purchase and is expected to close in the first quarter of Cisco’s fiscal year 2001. In connection with the acquisition, Cisco expects a one-time charge of about 3 cents per share on an after-tax basis for purchased in-process research and development expenses.

IPMobile’s 81 employees will continue to work under IPMobile Chief Executive Officer Russell Davis. Davis will report to Edward Paradise, vice president and general manager of the technology and mobile business unit in Cisco’s service provider unit.