Cisco 2007 Annual Report Download - page 52

2007 Annual Report 55
Notes to Consolidated Financial Statements
Shares Issued
Purchase
Consideration
Liabilities
Assumed
In-Process
R&D
Expense
Purchased
Intangible
Assets GoodwillFiscal 2005
Actona Technologies, Inc. — $ 90 $ 4 $ 4 $ 21 $ 66
Airespace, Inc. 2 3 447 11 3 95 337
NetSolve, Incorporated — 146 6 — 31 78
P–Cube Inc. — 213 17 6 56 150
Procket Networks, Inc. — 92 10 — 26 76
Topspin Communications, Inc. — 253 23 4 67 164
Other — 350 41 9 155 196
Total 2 3 $ 1,591 $ 112 $ 26 $ 451 $ 1,067
• The Company acquired Actona Technologies, Inc. to expand the functionality of its branch-office access routers with intelligent network
services that are designed to allow users at remote sites to access and transfer files as quickly and easily as users at headquarters sites.
The acquired technology is also designed to allow enterprises to centralize file servers and storage and better protect and manage their
remote office data.
• The Company acquired Airespace, Inc. to add to its portfolio of wireless local-area networking (WLAN) solutions and to add advanced
features and capabilities to the Company’s existing WLAN product portfolio.
• The Company acquired NetSolve, Incorporated to add remote network-management services, including real-time monitoring of IP
communications networks, network security software, and network devices, to the Company’s solutions offered to specialized resellers.
• The Company acquired P–Cube Inc. to provide additional control and management capabilities for advanced IP services, such as
identifying subscribers, classifying applications, and accurately billing for content-based services, to service providers.
• The Company acquired the intellectual property and selected other assets of, and hired a majority of the engineering team from, Procket
Networks, Inc. to add to the Company’s portfolio of intellectual property and to add a team of silicon and software architects.
• The Company acquired Topspin Communications, Inc. to add server fabric switches, a new class of server networking equipment that
is designed to help improve resource utilization and reduce equipment and management costs, to the Company’s switching product
portfolio consisting of network and storage switches.
The Consolidated Financial Statements include the operating results of each business from the date of acquisition. Pro forma results of
operations for the acquisitions, with the exception of Scientific-Atlanta, have not been presented because the effects of the acquisitions,
individually or in the aggregate, were not material to the Company’s financial results.
Acquisition of Scientific-Atlanta, Inc.
On February 24, 2006, Cisco completed the acquisition of Scientific-Atlanta, Inc., a provider of set-top boxes, end-to-end video distribution
networks, and video integration systems. Cisco believes video is emerging as the key strategic application in the service provider “triple
play” bundle of consumer entertainment, communications, and online services. Cisco believes the combined entity creates an end-to-end
solution for carrier networks and the digital home and delivers large-scale video systems to extend Cisco’s commitment to and leadership
in the service provider market.
Purchase Price Allocation Pursuant to the terms of the merger agreement, the Company paid a cash amount of $43.00 per share in
exchange for each outstanding share of Scientific-Atlanta common stock and assumed each Scientific-Atlanta stock option which was
outstanding immediately prior to the effective time of the merger. Each unvested Scientific-Atlanta stock option became fully vested
immediately prior to the completion of the merger. The Scientific-Atlanta stock options assumed were converted into options to purchase
an aggregate of approximately 32.1 million shares of Cisco common stock. The total purchase price was as follows (in millions):
Amount
Cash $ 6,907
Fair value of fully vested stock options assumed 163
Acquisition-related costs 17
Total $ 7,087