Cisco Systems agreed to acquire NetSolve, a provider of remote network and IT infrastructure management services for businesses, for a fixed price per share of $11 for all outstanding shares of the publicly-traded company (representing a value of approximately $128 million, minus the $40 million in cash currently held by NetSolve). Under the deal, Cisco will also assume certain outstanding options of NetSolve, which will be converted to Cisco options.
NetSolve's core services include the monitoring and management of IP communications networks, security software and devices, WANs and LANs. In addition, NetSolve offers a secure, web-based portal to give customers and partners real-time visibility of their IT infrastructure.
The companies said NetSolve's services would enable Cisco and its channel partners to offer customers real-time monitoring of Cisco products and help ensure continuous, secure operation of advanced IP services such as IP telephony and security. Cisco plans to offer these services to its partners via a resale model, a wholesale Application Service Provider (ASP) model, or via its Advanced Technology Partner program. http://www.cisco.com
- NetSolve was founded in 1987, went public in 1999 and has 292 employees. The company is based in Austin, Texas.
- For its fiscal quarter ended June 30, 2004, NetSolve reported revenue of $10.1 million, compared to $10.4 million for the prior quarter. The decline was anticipated due to reduced carrier business, related specifically to the substantial completion of the transition under the AT&T managed router services contract to AT&T internal centers in the prior quarter. Recurring management revenues from the core business at the end of the quarter grew 10% over the end of the prior quarter and 18% over the end of the same quarter a year ago. Orders from the company's core business represented 91% of the total orders during the quarter. Operating loss for the quarter was $674,000 as compared with an operating loss of $555,000 in the same quarter a year ago and $308,000 last quarter.
- Cisco's other acquisitions in 2004 have included:
P-Cube, a developer of IP service control platforms, for approximately $200 million in cash and options.
Procket, a developer of concurrent services routers with expertise in silicon and software development, for approximately $89 million in cash.
Parc Technologies, a spin off from a renowned center for research into search algorithms based at Imperial College, University of London, for $9 million. Parc's Route Server algorithms address network routing problems involving complex Quality of Service constraints.
Actona Technologies, a start-up developing software that facilitates data management across geographically distributed offices, for approximately $82 million in cash.
Riverhead Networks, a start-up offering security technology that protects against Distributed Denial of Service ("DDoS") attacks and other security threats in enterprise and service provider networks, for approximately $39 million in cash.
Twingo Systems, a start-up developing desktop security solutions for Secure Socket Layer (SSL) Virtual Private Networks (VPNs), for approximately $5 million in cash.
