Cisco Systems Inc. today acquired Scientific-Atlanta Inc., the Atlanta-based provider of set-top boxes, end-to-end ...
November 18, 2005
Cisco Systems Inc. today acquired Scientific-Atlanta Inc., the Atlanta-based provider of set-top boxes, end-to-end video distribution networks and video system integration.
Under the terms of the agreement, Cisco will pay US$43 per share in cash in exchange for each share of Scientific-Atlanta and assume outstanding options, for an aggregate purchase price of approximately US$6.9 billion or approximately US$5.3 billion net of Scientific-Atlanta’s existing cash balance.
The acquisition has been approved by the board of directors of each company and is subject to various standard closing conditions, including approval under Hart Scott Rodino and similar laws outside the U.S. and by the shareholders of Scientific-Atlanta.
“Video is emerging as the key strategic application in the service provider triple play bundle of consumer entertainment, communication and online services,” said John Chambers, president and CEO of Cisco.
Following the close of the transaction, Scientific-Atlanta will become a division of the Routing and Service Provider Technology Group under Cisco senior vice president Mike Volpi.
Until that happens, Cisco and Scientific-Atlanta will operate as separate businesses and will continue to work with their existing partners.
Amir Bassan-Eskenazi, CEO of BigBand Networks Inc., a provider of broadband multimedia infrastructure for video, voice and data, said one of the interesting elements of the acquisition is the differences in each company’s approach.
“Cisco has consistently leveraged IP networking standards, while Scientific Atlanta has gained its market share through more proprietary, closed system practices such as its conditional access methodologies,” he said. “Reconciling such ideological differences will be fascinating during integration efforts.”