Cisco Systems Inc. (NASDAQ:CSCO) continued its buying spree Monday,
announcing late in the day that it would pay up to $44.5 million to acquire the set-top box unit of China's DVN Holdings Ltd.
The San Jose, Calif.-based
networking company said it would pay $17.5 million when the deal closes. An earnout of up to $27 million could be paid by Cisco if the acquired unit clears certain sales hurdles during the next four years.
Cisco said it has also struck an agreement with the rest of DVN to use the company's middleware and advanced applications, and integration and support services.
Cisco's attraction to the Chinese cable market is understandable, as the it is the biggest in the market with 160
million subscribers, the company said. That figure could grow to 200 million in as little as three years. About one-third of the China
market has converted to digital cable, Cisco said.
"With the Chinese government
mandating full digitization by 2015, this represents an important long-term
opportunity for Cisco," the company said.
The deal follows a busy October for Cisco. The company on Oct. 1 announced that it would
acquire video teleconferencing company Tandberg ASA for $3 billion, and on Oct. 13 it said it
would buy wireless broadband technology developer Starent Networks Corp., for $2.9 billion. Last week it
agreed to buy ScanSafe, a privately held security software company, for $183 million. -
Olaf de Senerpont Domis
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