Cisco Systems announced it has signed a definitive agreement to acquire publicly-held Summa Four of Manchester, New Hampshire. Summa Four is a leading provider of programmable switches.
Under the terms of the acquisition, between 1.0 and 1.4 million shares of Cisco common stock will be exchanged for all outstanding shares and options of Summa Four. Based upon Cisco`s July 27, 1998 closing price of $97.50, the stock exchanged would have a value of approximately $116 million. In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of between $.04 and $.09 per share for purchased in-process research and development expenses in the first half of fiscal 1999. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act and approval by Summa Four stockholders.
Cisco Extends Voice Services to Packet-Based Networks
Summa Four`s open standards-based programmable switches will enable Cisco providers as well as extending these services to a voice-over-IP (Internet Protocol) infrastructure. These switches are used today 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.
Cisco intends to expand Summa Four`s existing relationships with application developers and will help them to extend their service platforms market-leading application developers who have built a broad array of voice solutions based on Summa Four`s switching family.
Summa Four was founded in 1976. The 210 employees led by Summa Four President and CEO, Robert Degan, will become part of Cisco`s Network-to-User Business Unit headed by Vice President and General Manager Kevin Kennedy within Cisco`s Service Provider line of business.
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