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Cisco eyes remaining interest in Nuova

Posted: 14 Apr 2008 ?? ?Print Version ?Bookmark and Share

Keywords:market data center? Cisco Nuova purchase? 10GbE Nexus 5000?

Cisco Systems Inc. has made known its intent to purchase the remaining 20 percent interest in Nuova Systems, a startup focused on the development of products for the data center market.

Prior to the acquisition, Nuova operated as a majority-owned subsidiary of Cisco, which had invested $70 million and owned 80 percent of the company. Cisco announced its initial investment in Nuova in August 2006 and announced an amendment to the agreement in April 2007 that expanded the development scope, increased the funding commitment and raised the maximum potential payout of the transaction to $678 million.

The Cisco investment and Nuova subsidiary structure allowed both companies to collaborate actively in the development of the Cisco Nexus 5000, a 10GbE switch that offers unified fabric through the support for multiple data center networking protocols and software intelligence.

"To succeed in today's marketplace and effectively deliver on our business strategy to capture key market transitions, Cisco drives a combination of internal R&D, industry partnerships and corporate development activities," said Ned Hooper, senior VP, corporate development and consumer and small business group, Cisco.

Nuova was founded by Ed Bugnion, Luca Cafiero, Prem Jain, Soni Jiandani, Tom Lyon and Mario Mazzola. All six founders and the company's approximately 200 employees are expected to join Cisco.

Nuova will operate as an independent business unit led by Cafiero, Jain and Mazzola who will all report into John Chambers, Cisco's CEO and chairman. In addition, to help ensure alignment with Cisco's development priorities, Jain has been appointed as the ninth member of the development council in Cisco's development organization.

The acquisition is expected to close in Q4 of Cisco's FY2008.

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