The acquisitive Cisco Systems Inc, which has been a whole month without an acquisition, has struck again, this time with and $126m purchase of digital subscriber line technology specialist Dagaz Technologies Inc. Dagaz is a division of privately owned Bridgewater, New Jersey-based Integrated Network Corp. Cisco will pay $108m in cash, and 230,000 Cisco shares – valued at the current stock price at $18m – with the transaction expected to be completed in August. Cisco expects an after tax earnings charge of between $0.08 and $0.11 per share in the first quarter 1998, and a neutral earnings per share impact in the first year. The Dagaz products and 30 employees including the president and chief operating officer Dr Dev Gupta, will be incorporated into Cisco’s Network to User Business Unit. INC will use the proceeds to fund further research and development in its remaining division the Network Access division, which supplies channel banks, CSU/DSUs and other products to telecoms carriers. Dagaz has three DSL over ATM products, the Thurisa DSL modem, the Odin 3000 multiprotocol gateway for integrating voice, video, and Data, and the DSL central office concentrator Jera, a DSL access Multiplexor which is an ATM at 622Mbps. But Cisco is not buying Odin, as it already has similar technology. Cisco plans to use the technology to shore up its DSL product line, having acquired Telesend Inc for IDSL technology (CI No 3,129) this year, and Telebit Corp (CI No 3,036) for digital modem technology last year. Cisco plans to market the Dagaz as soon as the purchase is completed, and will add the Cisco IOS network operating system to the products. Cisco is not saying how soon it will integrate the core technology into its own product range.
