September 15, 1998 8:30 AM PDT
Cisco to buy Clarity Wireless
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Cisco to buy American InternetAugust 21, 1998
This acquisition provides Cisco with fixed wireless technology, to complement its own network solutions, including dial, xDSL, and cable. Clarity develops wireless communication technology for computer networking and Internet service markets.
Like the software giant Microsoft, Cisco has often purchased companies that have developed systems that complement its own offerings. In its effort to push into new markets, Cisco recently acquired privately held American Internet for $56 million in stock.
Under the terms of the acquisition, shares of Cisco common stock with an aggregate value of approximately $157 million will be exchanged for all outstanding shares and options of Clarity not already owned by Cisco. Cisco has been a minority investor in earlier private placement funding of Clarity. The acquisition is expected to be completed by November 1998 and is subject to certain closing conditions.
In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of between 6 cents to 9 cents per share for purchased in-process research and development expenses in the second fiscal quarter of 1999. These per share numbers take into account Cisco's 3-to-2 stock split effective today after the market closes.
Shares of Cisco rose slightly on the news, up less than 1 percent to 94.25. The stock has traded as high as 105.25 and as low as 45.38 during the past 52 weeks.