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54 Cisco Systems, Inc.
Notes to Consolidated Financial Statements
3. Business Combinations
Purchase Acquisitions
A summary of the purchase acquisitions and asset purchases completed in fiscal 2007 is as follows (in millions):
Shares Issued
Purchase
Consideration
Liabilities
Assumed
In-Process
R&D
Expense
Purchased
Intangible
Assets GoodwillFiscal 2007
Arroyo Video Solutions, Inc. — $ 86 $ 1 $ 3 $ 25 $ 57
IronPort Systems, Inc. 13 718 119 7 231 539
Reactivity, Inc. — 110 4 1 39 72
WebEx Communications, Inc. — 3,025 80 66 541 2,098
Other — 275 18 4 90 180
Total 13 $ 4,214 $ 222 $ 81 $ 926 $ 2,946
• The Company acquired Arroyo Video Solutions, Inc. to enable carriers to accelerate the creation and distribution of network-delivered
entertainment, interactive media, and advertising services across the growing portfolio of televisions, personal computers, and
mobile handsets.
• The Company acquired IronPort Systems, Inc. to extend the Company’s security portfolio in e-mail and messaging security solutions.
• The Company acquired Reactivity, Inc. to complement and extend the Company’s application networking services portfolio, within
advanced technologies.
• The Company acquired WebEx Communications, Inc. (“WebEx”) a provider of on-demand collaboration applications. WebEx’s
network-based solution for delivering business-to-business collaboration extends the Company’s unified communications portfolio,
particularly within the small to medium-sized business (SMB) market.
Under the terms of the definitive agreements related to the acquisitions and asset purchases, the purchase consideration in fiscal 2007
consisted of cash, shares of Cisco common stock, and fully vested stock options assumed. The purchase consideration for the Company’s
acquisitions and asset purchases is also allocated to tangible assets acquired.
A summary of the purchase acquisitions and asset purchases completed in fiscal 2006 and 2005 is as follows (in millions):
Shares Issued
Purchase
Consideration
Liabilities
Assumed
In-Process
R&D
Expense
Purchased
Intangible
Assets GoodwillFiscal 2006
KiSS Technology A/S 1 $ 51 $ 18 $ 2 $ 19 $ 39
Scientific-Atlanta, Inc. — 7,087 697 88 1,949 3,762
Sheer Networks, Inc. — 96 7 — 29 56
Other — 123 6 1 55 78
Total 1 $ 7,357 $ 728 $ 91 $ 2,052 $ 3,935
• The Company acquired KiSS Technology A/S to develop networked entertainment products for the consumer.
• The Company acquired Scientific-Atlanta, Inc. to create an end-to-end solution for carrier networks and the digital home and deliver
large-scale video systems to extend Cisco’s commitment to and leadership in the service provider market.
• The Company acquired Sheer Networks, Inc. to provide technology that is designed to adapt to network changes, scale to large
networks, and help extend new technologies and services that simplify the task of monitoring and maintaining complex networks.