Cisco Systems pulled the trigger on two acquisition targets on Wednesday, buying network software startup Hammerhead Networks for stock worth up to $US173 million, and circuit design firm Navarro Networks for stock worth up to $85 million.
Two other undisclosed companies in which Cisco has invested may also be acquired for the San Jose, California, networking company's portfolio soon.
Hammerhead Networks makes software to speed up billing, security and quality-of-service features for IP (Internet protocol) networks without degrading network performance. Cisco said it plans to integrate Hammerhead technology into its IP aggregation portfolio consisting of cable, broadband and leased-line hardware and software.
Navarro Networks develops ASIC (application-specific integrated circuit) components for the Ethernet market. Cisco intends to improve its internal development of new, high-end ASICs with Navarro's technology, while improving Cisco's technology choices for designing next-generation Ethernet switching platforms, Cisco said.
Both Hammerhead and Navarro are privately held, and the specific number of Cisco shares used for the purchase was not disclosed. The acquisitions are subject to various closing conditions and approvals, but the boards of directors for each company have approved the deals, Cisco said. Cisco expects the purchases to close in its fourth quarter.
It did not say whether Hammerhead and Navarro exercised their options to force a purchase or Cisco moved first to buy the companies. Cisco estimated it would cost $500 million in stock to purchase three of the four companies, and based on Cisco's SEC filing, it appears that two of those three are Hammerhead and Navarro.
Cisco expects to acquire the remaining interest in the third company within the next six months, according to the filing.