Cisco has signed an agreement to buy networker Stratacom in a massive all-share deal which values Stratacom at $4 billion. Stratacom supplies ATM high-speed networking switching equipment and specialises in wide area networking.
Under the deal, each share of Stratacom will be exchanged for a Cisco share which is currently valued at around $47 up to a share price ceiling of $50. If the Cisco share price falls Stratacom shareholders will get a guaranteed $41 per share. Subject to approval, the deal will be completed by the end of June 1996.
Stratacom has a UK sales office in Fleet, Hampshire, and a limited UK distribution channel. Cisco UK managing director Adrian Weeks said the deal was excellent news for Cisco. 'It enables us to provide end-to-end solutions to customers,' he said. Weeks said that Cisco was still sorting through the logistical implications of the deal, but that it would give better access to Stratacom products through the wider Cisco channel.
'There is very little overlap. Our product sets are 95 per cent compatible,' he said. Cisco claimed the deal would create a 'combined entity' which would be positioned to deliver integrated, scalable multiservice network solutions to public carriers, Internet service providers and enterprises. Stratacom is a supplier of wide area voice networks to a number of major telephone companies including BT.
The two companies have also signed a concurrent licensing and OEM deal, under which Stratacom will license Cisco Ios software for integration into its line of wide area networking switching products. Cisco will distribute and resell Stratacom's entire product line worldwide.
A Cisco representative said the acquisition would slightly dilute the company's earnings in fiscal 1997, but that would be offset by gains from its appreciated securities.
Chief exec Jens Montanana claims Logicalis performed well despite 'currency headwinds'
All the photos from last night's event, which saw over 600 people congregate at the Hilton London Bankside
Five year deal with Essex NHS Trust will cover 400 sites, including hospitals, clinics and GP practices
18 individuals and three companies walked away as winners at CRN's inaugural Women in Channel Awards last night