Cisco boosts wireless strategy with acquisition

Cisco Systems today struck a $425 million stock deal to purchase privately held IPmobile in a play to add wireless networking software to its lineup.

Under terms of the agreement, Cisco common stock will be exchanged for all outstanding shares and options of IPmobile. The acquisition will be accounted for as a purchase and is expected to be completed in the first quarter of Cisco's fiscal year 2001.

IPmobile is a developer of IP radio access networking software (IP-RAN), which connects wireless base stations to the Internet.

In connection with the acquisition, Cisco expects a one-time charge of approximately 3 cents per share on an after-tax basis for research and development expenses.

Wireless technology and services that tie the Internet with mobile devices are becoming more important to companies looking to provide Internet data to their mobile work force and to a growing number of consumers who own mobile devices.

Cisco's latest acquisition marks its 16th purchase so far this year. Executives have made clear Cisco's intention to buy 20 to 25 companies this year as part of an ongoing strategy to gain access to new technology and engineering talent.

The purchase has been approved by the board of directors of each company and is subject to various closing conditions, the companies said.

IPmobile was founded in 1999. The 81 employees will be led by IPmobile CEO Russell Davis and report to Edward Paradise, vice president and general manager of Cisco's technology and mobile business unit. No details were given on whether the IPmobile employees will have to transfer locations.