Cisco Systems and Scientific-Atlanta, Inc today announced a definitive agreement for part of Cisco to acquire Scientific-Atlanta.
Scientific-Atlanta is a global supplier of receiving boxes, distribution networks end-to-end video and system integration video. These combined elements create a triple solution end-to-end play for carrier and home networks. Additionally, and once the acquisition is completed, due to the market opportunity represented by this acquisition, is will become a Cisco Advanced Technology.
Under the terms of the agreement Cisco will pay $43 in cash for each of the shares of Scientific-Atlanta, and will assume the options for an added value of purchase of approximately US$6.9 billion, or approximately $5.3 billion net from the current cash balance of Scientific-Atlanta.
The transaction will be accounted for in accordance with accounting principles generally accepted and expected to be finalized during the third Cisco's fiscal year 2006 quarter. Cisco expects this transaction is neutral for fiscal year results 2006, and will increase somewhat for the pro forma results of the year fiscal 2007, and will be financed with a combination of cash and debt. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions regular, including passage under the Hart Scott Act Rodino and others like it outside the United States and by the shareholders of Scientific-Atlanta.
Scientific-Atlanta has platforms and technologies that enable expansion to millions of subscribers easily and quickly. This, along with the Cisco Next Generation IP Networking architecture, you provide suppliers with an open platform for differentiation of their services allowing them to move further video/IPTV to develop and deliver a variety of integrated media services in the connected home.
After the closing of the transaction, Scientific-Atlanta will become a division of the Cisco Routing and Service Providers under the leadership of the Cisco Senior Vice President Mike Volpi. Jim McDonald to Report directly to Volpi.
While the closing of The transaction, Cisco and Scientific-Atlanta will operate as separate businesses and will continue to work with their current ones business partners. After the closing of the transaction is Cisco's commitment to maintaining the relationships and strategies of arrival to the market that both companies have developed.
