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Internet networking giant buys P-Cube for $200 million

Internet networking giant Cisco Systems agreed to acquire closely held Internet protocol service provider P-Cube for 200 million dollars in cash and options. The move boosts Cisco's capacity for the fast-growing Voice-over-IP Internet telephony market as well as other services such as interactive gaming, video-on-demand, and peer-to-peer technology.

P-Cube, based in Sunnyvale, California, helps Internet service providers identify subscribers, classify applications, improve service performance, and charge for multiple IP services without adding infrastructure.

Cisco is the world's largest manufacturer of networking equipment to facilitate the transfer of data across the Internet, informs Channel News Asia.

Cisco's stock rose one percent to $19.07 in midday trading following the news.

The acquisition is expected to close during the current quarter, subject to various closing conditions. Cisco said it expects to record a one-time charge not exceeding one cent a share for purchased in-process research and development expenses.

P-Cube, which maintains its headquarters in Sunnyvale, California, was founded in Israel in 1999 and has 118 employees worldwide. Once the acquisition is closed, the P-Cube team will report to Pankaj Patel, vice president and general manager of Cisco's Broadband Edge and Midrange Routing Business Unit.

P-Cube has raised $70m. of venture capital financing in three rounds, held in March 2002, August 2000, and October 1999. Its investors include Israeli funds Evergreen and Microdent, as well as an international array of players like Accel, ComVentures, Ascend, GCP, Granite, Panasonic VC, Sandoz, SingTel, TDF Ventures, TIF, and Venrock.

Cisco's net income rose 41% to $1.38 billion in its fiscal fourth quarter, which ended in July, as sales rose 26% to $5.93b. It said revenues will be 16% to 18% higher this quarter, writes Jerusalem Post.

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