In a move that the company said would strengthen its New World strategy and its ability to deliver next-generation wireless networks using the IEEE 802.11a standard, Cisco Systems Inc. agreed to purchase Radiata Inc., a supplier of chipsets for high-speed wireless networks using the 802.11a standard.
The agreement, which has been approved by both companies’ boards of directors, calls for Cisco to exchange $295 million of its common stock for all outstanding shares and options of privately held Radiata. Cisco currently holds an 11-percent investment in Radiata, and said it expects the acquisition to account as a one-time charge for purchased in-process research and development expenses not to exceed 2 cents per share.
“Radiata is a leader in 802.11a technology,” said Bill Rossi, vice president and general manager of wireless networking business unit at Cisco. “With their technology, we will be able to hit the market with 802.11a products six months ahead of the competition.”
Radiata currently supplies Cisco with semiconductor technology and radio and modem systems expertise for developing next-generation wireless networks based on the 802.11a standard. That standard is designed to operate in the unlicensed 5 GHz frequency range, enabling wireless communications between devices at speed up to 54 Megabits per second.
Radiata’s product portfolio also includes recently introduced baseband processor and radio chips, both of which will be integrated into Cisco’s family of Aironet wireless local area network products, including access points, adapters and bridges.
Radiata is currently shipping its Aironet 340 Series line of products based on the 802.11b wireless standard, which operates in the unlicensed 2.4 GHz frequency range at speeds up to 11 Mbps.
With plenty of competition in the wireless networking market from 802.11b, HomeRF and Bluetooth, Cisco said it felt it needed to get a leg up on 802.11a, which offers greater bandwidth for its networking needs and higher security over the competing wireless standards.
“[802.11a] was important enough to us that we knew we had to have a solid plan there,” Rossi noted. “We know we have to be successful in all markets to be successful as a company.”
Rossi added that Cisco has spent a lot of time educating people on the advantages of 802.11a over competing technologies, and with the purchase of Radiata, Cisco will have a head start on getting those products to customers.
