Cisco Nabs Active Voice for $300 Million

Cisco Systems Inc. Friday entered into a definitive agreement to acquire
publicly held Active Voice Corp. in a deal valued at more than $300 million.

Under the terms of the agreement, Cisco will pay approximately $266
million in stock for Active Voice’s Unity operation and $30 million in stock
for Active Voice’s circuit switched PBX voicemail solutions.

After the acquisition closes, the PBX voicemail entity will be sold to a
newly formed entity comprised of former Active Voice employees for $30
million. The purchase price will be shared by all Active Voice

Active Voice is a provider of Internet Protocol (IP)-based unified
messaging solutions for the enterprise, that combine e-mail, voice and fax
messages into a single, common mailbox accessible via any Internet-connected
device anywhere, any time.

The acquisition accelerates Cisco’s plan to delivering unified
communications solutions that will help enterprises enhance employee
productivity, lower cost of ownership and provide better customer care,
said Eugene Lee, vice president of marketing, Cisco.

“The acquisition presents us with an opportunity to create benefits for our customers and penetrate the unified communications field and to hit the ground running,” he said. “There have been obstacles in the adoption of unified communications networks because of interoperability problems. Active Voice is a strong player in this arena in terms of offering interoperability with legacy systems.

“The growth of the IP telephony market is accelerating,” added Lee. “The acquisition of Active Voice’s Unity operation represents an important step in the advancement of Cisco’s architecture for voice, video
and integrated data.”

As of Thursday, there were approximately 14.8 million shares of Active
Voice outstanding on a fully diluted basis. The acquisition will be
accounted for as a purchase and is expected to be complete in the second
quarter of Cisco’s fiscal year 2001.

In connection with the acquisition, Cisco expects a one-time charge for
purchased in-process research and development expenses not to exceed $0.02
per share. The acquisition has been approved by the board of directors of
each company and is subject to various closing conditions including Active
Voice shareholder approval and approval under the Hart Scott Rodino
Antitrust Improvements Act.

Active Voice’s Unity product offerings complement Cisco’s existing
IP-based voice solutions by providing advanced capabilities that enable the
unification of both text and voice. Cisco believes such applications will
help drive continued adoption of IP telephony, according to the Cisco

Shares of Cisco showed a decline of 2.1 percent Friday morning with a
price of $52 1/8, down by $1 1/8. Active Voice shares remained at $14 15/16.

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