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Cisco shells out $128.7m for system monitoring firm

Deal expected to be finalised early next year

By Jim Hu

Published: 10 September 2004 09:30 BST

Cisco Systems has signed an agreement to acquire IT system monitoring firm NetSolve for $128.7m.

The networking giant will pay $11 a share in cash for NetSolve's 11.7 million outstanding shares. Cisco will assume outstanding options of NetSolve and convert them into its own options, once the deal closes, which is expected to happen in the second quarter of 2005.

NetSolve offers services that involve monitoring and managing corporate internet systems and internal networks. Cisco said it will use NetSolve's technology to offer customers a way to monitor the performance of Cisco's products in real time.

"We will be able to offer network operations services that are tightly integrated with our channel partners' service offerings," Wim Elfrink, Cisco's senior VP of customer advocacy, said in a statement.

NetSolve also has security technology for Net-based phoning in its portfolio.

In after-hours trading, shares of NetSolve surged more than 21 per cent to $10.81, up from Thursday's close of $8.90.

NetSolve CEO David Hood will report to Elfrink when the deal closes.

Jim Hu writes for CNET News.com

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