Acquisitive networking giant Cisco Systems has bought digital subscriber line specialist Dagaz Technologies to gain access to hardware products that speed up networking traffic across existing phone lines.
Dagaz, a subsidiary of Integrated Network Corporation (INC), has two hardware products, Thurisa and Jera, which are used to transfer data across telephone lines. The products are aimed at carriers and internet service providers.
The deal combines a $108 million cash payment and a stock option plan worth $16.5 million.
INC spun off the company at the beginning of this year in a bid to find a buyer, according to INC marketing director Greg Moore. He said INC is not big enough to deal effectively with regional phone companies in the US.
Rather than allowing executives to comment directly on the purchase, Cisco asked its partners to endorse its buy.
Phone companies GTE Communications and US West said it will help them deploy efficient services more quickly. Cisco claimed ISPs will adopt the products as they offer a cheap way of satisfying bandwidth demand without spending a fortune.
Cisco bought another DSL firm, frame multiplexer card vendor Telesend, in March. It has now bought 19 companies in under four years.
The Dagaz acquisition should be completed in August, and will cost Cisco extra write-off charges worth between $53.5 million and $73.6 million in its Q1 1998 results.
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