Cisco Acquires Linksys

Cisco Systems, has acquired the business of privately held The Linksys Group, Inc. Linksys is the leading provider of home networking products with a broad line of wired and wireless products for consumers and SOHO (small office/home office) users. The acquisition, Cisco says, represents its entry into "high-growth consumer/SOHO networking market, which is expected to grow from $3.7 billion in 2002 to $7.5 billion in 2006 worldwide". Under the terms of the agreement, Cisco will issue common stock with an aggregate value of approximately $500 million to acquire the Linksys business and to assume all outstanding employee stock options. The acquisition of Linksys is expected to close in the fourth quarter of Cisco's fiscal year 2003. 

"Fueled by consumer broadband adoption, the home networking space has experienced mass market acceptance. Linksys has captured a strong position in this growing market by developing an extensive, easy-to-use product line for the home and small office," said John Chambers, president and CEO of Cisco Systems. "This acquisition is a solid example of Cisco's strategy to broaden its end-to-end portfolio of network solutions into high-growth markets such as wireless, voice-over-IP and storage area networking."