Cisco Systems will acquire V-Bits, a privately held maker of standards-based digital video processing systems for cable television service providers.
Under the terms of the agreement, Cisco common stock worth $US128 million will be exchanged for all outstanding shares, warrants and options of V-Bits, according to a statement from Cisco.
The acquisition will be accounted for as a pooling of interests and is expected to close during Cisco's second quarter of fiscal year 2000, the company said.
V-Bits' core product is a cable headend device that processes video streams from different satellite and broadcast sources, according to Cisco. The acquisition of V-Bits will help Cisco deliver broadband technology to cable operators seeking to offer their customers data, voice and video services over a single, digital cable network infrastructure, according to the statement.
Founded in 1997, San Jose-based V-Bits will become part of Cisco's Cable Products and Solutions group, Cisco said. V-Bits' chief executive officer Mike Moone will head up the 30-member group, according to Cisco.
Both companies' boards of directors have approved the acquisition, which is still subject to standard closing conditions, according to Cisco's statement.