[THIN] Off Topic: News: Cisco to buy Linksys

  • From: "Greg Reese" <GReese@xxxxxxxxxxxxxxxx>
  • To: <windows2000@xxxxxxxxxxxxx>, <thin@xxxxxxxxxxxxx>
  • Date: Thu, 20 Mar 2003 10:04:34 -0500

link to full article:

http://smartmoney.com/bn/ON/index.cfm?story=3DON-20030320-000703-0847

03-20-03 0847ET=20
SAN JOSE -(Dow Jones)- Cisco Systems Inc. (CSCO) signed a definitive =
agreement to buy Linksys Group Inc., a provider of home networking =
products, for about $500 million in common stock.=20
Based on the closing price Wednesday of Cisco stock, at $14.22, the =
Linksys agreement represents about 35.2 million shares. The maker of =
Internet routing equipment has about 7.1 billion shares outstanding.=20
In a press release Thursday, Cisco said the Linksys acquisition marks =
its entry into the consumer and small-office or home-office networking =
market. These kinds of home networks allow consumers to share broadband =
Internet connections, files and digital content over a wired or wireless =
local area network.=20
Linksys has more than 70 home networking products, including wireless =
routers, adapters and print servers, as well as traditional wired =
products such as Ethernet routers and cable modems.=20
(MORE) Dow Jones Newswires=20
03-20-03 0909ET=20
Cisco will assume all outstanding Linksys employee stock options in =
addition to the $500 million stock issuance. The company expects to =
close the deal in its fiscal fourth quarter ending in late July, pending =
antitrust clearance and other conditions.=20
Cisco expects the acquisition to lower its earnings per share by no more =
than 1 cent for the fiscal year ending in July 2004, and to add to =
earnings thereafter. Excluding acquisition charges, the Linksys purchase =
should add about 1 cent to fiscal 2004 earnings per share.=20
A Thomson First Call survey of 36 analysts yielded a mean earnings =
estimate of 63 cents a share for fiscal 2004.=20
For the year ended July 27, Cisco earned $1.9 billion, or 25 cents a =
share, on revenue of $18.9 billion. Excluding research and development =
charges, amortization costs and certain inventory and tax benefits, the =
company earned $2.87 billion, or 39 cents a share.=20
(MORE) Dow Jones Newswires=20
03-20-03 0922ET=20
Linksys' annual revenue is about $400 million, a Cisco spokeswoman said. =
She said the closely held firm is profitable, but she wasn't able to =
immediately provide specific figures.=20
Linksys' products will continue to be sold under the Linksys brand =
through its existing retail, distributor and e-commerce channels, Cisco =
said. The firm's 308 employees, including Chief Executive Victor Tsao, =
will join Cisco's work force of about 36,000.=20
In another move to boost its product offerings to small-business =
customers, Cisco on Tuesday announced it agreed to acquire closely held =
SignalWorks Inc. for $13.5 million in stock. SignalWorks, Mountain View, =
Calif., makes audio software for Internet protocol telephone systems.=20
Cisco also said Tuesday it plans to buy back an additional $5 billion of =
its own common shares.=20
The company has scheduled a conference call for 10 a.m. EST Thursday.=20
Company Web site: www.cisco.com=20
-Pamela Tate; Dow Jones Newswires; 201-938-5400=20
(END) Dow Jones Newswires=20

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