SAN JOSE, Calif.-Internet networking company Cisco Systems Inc. last week signed a definitive agreement to acquire Summa Four Inc., a provider of programmable switches.
Cisco said Summa Four’s open standards-based programmable switches will allow it to offer value-added telephony applications to new and existing service providers as well as extend those services to voice-over-Internet Protocol infrastructure. The switches currently are used by service providers for basic call switching as well as delivering value-added services such as voice mail, calling card and voice-activated dialing.
“This acquisition reaffirms Cisco’s strategy to provide an open services environment enabling applications for circuit-and packet-switched networks,” said the company.
Terms of the agreement call for between 1 million and 1.4 million shares of Cisco common stock to be exchanged for all of the outstanding shares and options of Summa Four. Based on Cisco’s closing price on July 27 of $97.50, the acquisition would have a value of about $116 million.
Cisco said it expects to record a one-time charge against after-tax earnings of between 4 cents and 9 cents per share for purchased in-process research and development expenses in the first half of 1999.
Both companies’ boards of directors have approved the acquisition. The deal is subject to various closing conditions, including approvals of Summa Four stockholders and Hart-Scott-Rodino.
