Summary
On August 19, 2002, Cisco Systems, Inc. (CSCO) announced a definitive agreement to acquire Andiamo Systems, Inc., a privately-held company. This acquisition represents Cisco's exercise of a previously disclosed right to acquire Andiamo, with an initial investment made in April 2001. The transaction is anticipated to close in the third quarter of fiscal year 2004, with a maximum closing date of July 31, 2004. The deal terms involve the exchange of Cisco common stock for Andiamo shares and options not already owned by Cisco. The purchase price is contingent on Andiamo's revenue generated from Cisco's sales of Andiamo products during a specified period before closing, with pricing adjustments based on Cisco's market capitalization to revenue ratio. Cisco has already invested approximately $74 million in Andiamo through convertible debt and is committed to providing an additional $100 million in funding before the acquisition closes. Notably, all funded amounts have been expensed as research and development costs by Cisco.
Key Highlights
- 1Cisco Systems to acquire privately-held Andiamo Systems, Inc.
- 2Acquisition is an exercise of a previously secured right to purchase Andiamo.
- 3Transaction expected to close in Q3 FY2004, no later than July 31, 2004.
- 4Purchase price based on Andiamo's revenue derived from Cisco sales, with price adjustments linked to Cisco's market capitalization and revenue.
- 5Maximum purchase price capped at approximately $2.5 billion in Cisco common stock.
- 6Cisco has already invested $74 million in Andiamo via convertible debt and committed to further funding up to $100 million.
- 7Previous investments totaling $74 million have been expensed as R&D costs by Cisco.