Cisco System

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 23, 2004--Cisco Systems, Inc. (Nasdaq:CSCO), today announced a definitive agreement to acquire privately held P-Cube, Inc. of Sunnyvale, Calif. P-Cube is a leading developer of IP service control platforms, which can help service providers identify subscribers, classify applications, improve service performance and charge for multiple IP services without costly infrastructure upgrades. With this acquisition, Cisco will offer service providers additional capabilities to control and manage advanced IP services such as Voice-over-IP, interactive gaming, Video-on-Demand, and Peer-to-Peer, as well as create other differentiated offerings.

Under the terms of the agreement, Cisco will pay approximately $200 million in cash and options. The acquisition of P-Cube is subject to various standard closing conditions and is expected to close in the first quarter of Cisco's fiscal year 2005. In connection with the acquisition, Cisco expects to record a one time charge for purchased in-process research and development expenses not to exceed $0.01 per share.

"Application and subscriber-aware technology solutions like P-Cube's provide the ability to differentiate and control new content-based data services. Cisco's acquisition of P-Cube further emphasizes our commitment to service providers and our on-going development efforts to bring service intelligence into IP data networks," said Mike Volpi, senior vice president and general manager, Routing Technology Group, Cisco Systems, Inc., "This technology complements Cisco's overall portfolio of Broadband Edge products."

Today, millions of subscribers connect to an array of data services through a wide spectrum of access methods including wired and wireless. Service providers are demanding greater flexibility in their network infrastructure, which can only be accommodated by adding service intelligence. P-Cube's Service Control solutions add additional intelligence and application-level control on to existing IP transport networks -- enabling service providers to analyze, control and meter application and content-based services.

P-Cube's technology offers a stateful deep packet inspection capability that provides application-awareness while quality of service is maintained through real-time application control. The programmable nature of the platform further ensures that operators can rapidly extend their infrastructure to support new requirements and customer demands as they evolve.

Upon close of the acquisition, the P-Cube team will report to Pankaj Patel, vice president and general manager of Cisco's Broadband Edge and Midrange Routing Business Unit. P-Cube was founded in 1999 and has 118 employees.