6 , 2000
SAN JOSE, CA May 5, 2000-Cisco Systems, Inc. (NASDAQ:CSCO) announced the
acquisition of ArrowPoint Communications, Inc. (NASDAQ:ARPT) of Acton,
MA. ArrowPoint Communications is the leading provider in content switches
that optimize the delivery of web content. The acquisition of ArrowPoint
Communications in conjunction with Cisco's broad range of Internet products
will enable ISP's to have a higher level of intelligence to provide to
their high volume customers.
of the agreement are based on a common stock exchange. Cisco will exchange
2.1218 shares of common stock for all outstanding shares and options of
ArrowPoint Communication. The purchase price of this acquisition is approximately
$5.7 billion [USD] with the value of Cisco stock at $63 5/8. This acquisition
will be completed during Cisco's fourth quarter of 2000.
Cisco's acquisition of ArrowPoint Communications fills a void in Cisco's
arsenal of Internet based products. ArrowPoint's content switching solution
will enable Cisco customers to benefit from a feature packed piece of
hardware and software. This feature set will enable Cisco to deliver an
enhanced level of network services to direct traffic based on the content
acquisition will provide Cisco with a strong and complete product line
to offer providers in the up-and-coming Internet marketplace that contains
the Application Service Providers (ASP) and Application Infrastructure
Provider (AIP). The combination of these two vendors' product lines will
enhance the abilities of the providers to direct traffic based on content
thus improving performance and throughput for the end user.
This is a big win for Cisco Systems. Cisco had been lagging behind the
other Ethernet switch vendors in the area of content switching. With Cisco
acquiring ArrowPoint Communications, a leading vendor in content switching
market, Cisco will be able to integrate the newly acquired product line
with their Catalyst multilayer switching family.
Catalyst family will best be served by having ArrowPoint's software integrated
into Cisco's IOS software. The integration between ArrowPoint's content
based software and Cisco's IOS has a 60% chance to be completed by the
fourth quarter of 2000. While software integration will take time, ArrowPoint's
content switches will be available immediately. This integration will
give Cisco customers a comprehensive software or hardware solution to
meet their developing expectations for today and the future.