Cisco Kid on Buying Spree

Bears call it monopoly money. Net companies call it currency. Either way
you slice it, M&A activity continues at a brisk pace, despite recent
volatility. Retail investors got a nasty case of vertigo during Nasdaq’s
record run, but the same investors are frantically searching for the tech
stock inflection point.


With traders taking Net newcomers out behind the shed, many companies
boasting a stronger currency will take this opportunity to go on the
acquisition trail. Many start-ups are losing fistfuls of market cap by the
day and, for some buyers, it’s a true blue light special.


There’s nothing like a market correction to separate the contenders from
the pretenders. But one thing’s for sure, the smart money is busy stuffing
their portfolios like the Pop n’ Fresh Pillsbury Dough Boy. Give it a few
weeks and we’ll be retesting old highs. In the meantime, it’s a game of
cyber-limbo.


Micron Electronics (MUEI), through its wholly-owned subsidiary Micron Government Computer Systems
(MGCSI), unveiled plans to acquire assets from Inacom Government
Systems
. While both companies were mum on terms of the deal, the move
should boost the PC solutions firm’s range of services geared toward its
government customers.


Inacom Government Systems, formerly Vanstar Government Systems, is a wholly
owned subsidiary of Inacom (ICO),
an e-business and infrastructure solutions company. Inacom Government
provides one-stop-shop tech services for government customers throughout
the U.S. The company collected a healthy $119 million in revenues last
year. Both Micron Electronics and Inacom shed a quarter point following
news of the announcement.


















DealTracker scorecard: Micron
Electronics/Inacom Government Systems

Investor
sentiment
B+
Terms of the
deal
n/a
Industry
outlook
B-
Overall
scorecard
B


The Cisco kid added another deal to its growing list of acquisitions. The
networking giant grabbed an 11 percent minority stake in Pentacom
back in June of last year. Cisco (CSCO)
sealed the deal less than a year later with yesterday’s announced $118
million acquisition of the privately held Israel-based company.


Cisco plans to use this latest union to expand its product portfolio and
help service providers build more flexible, manageable and cost effective,
end-to-end Net protocol-based networks. Already the company is on pace to
scoop up between 20 and 25 companies this year, fed by four deals announced
just last March.


Cisco topped the list of Nasdaq’s most actives, tumbling $2 9/16 to $70.
The stock has held its own amidst tech’s wild roller coaster ride in recent
weeks, slipping 10 percent since its 2-for-1 stock split in m

id-March.


















DealTracker scorecard: Cisco/Pentacom

Investor
sentiment
B+
Terms of the
deal
A-
Industry
outlook
A-
Overall
scorecard
A-

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