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Cisco Still Shopping Deal propels Cisco into ADSL By Loring Wirbel, EE Times San Jose, Calif. -- Cisco Systems Inc. last week expanded its ADSL modem and access-multiplexer business by acquiring the Dagaz Technologies Inc. subsidiary of Integrated Network Corp. (Bridgewater, N.J.) for about $125 million. While Dagaz had not made as large a name for itself in ADSL as some venture-funded startups, Cisco was impressed by the end-to-end solutions represented by that company's Thurisa subscriber modems and Jera DSL access multiplexers, or DSLAMs. The asynchronous-transfer-mode technology base of the Jera DSLAMs fit Cisco's concepts for WAN-transport mechanisms, said Roland Acra, director of marketing for Cisco's dial-up network products. Dagaz also impressed Cisco by bringing in public-networking expertise from such companies as Lucent Bell Labs and Newbridge Networks Inc., Acra said. "Many DSL OEMs have good technology, but we were looking for a strong telco background in management . . . to expand our carrier expertise," Acra said. This is not Cisco's first experience in DSL acquisitions. Earlier this year, it bought Telesend Corp. to gain some ISDN-over-ADSL, or IDSL, expertise. But Dagaz' completion of ADSL equipment based on carrierless amplitude/phase modulation (CAP) chip sets from Globespan Technology Inc. allows Cisco to expand into high-speed Internet-download markets represented by ADSL and Rate-Adaptive DSL. Acra emphasized that Cisco is not taking sides in a line-code war between CAP and discrete-multitone (DMT) algorithms. The company plans to upgrade Dagaz equipment using DMT chip sets so Jera DSLAMs and Thurisa subscriber modems can support both codes. Work will extend to very high-bit-rate DSL as well, Acra said. The entire 30-person staff of Dagaz will move to Cisco, including chief executive Dev Gupta. Dagaz will become part of Cisco's network-to-user business unit, and Gupta will report to Cisco vice president Kevin Kennedy, who heads that unit. The deal was a mix of cash and stock worth close to $125 million--$108 million in cash and 230,000 shares of Cisco stock worth about $16.5 million. Cisco expects to take a one-time charge in the first fiscal quarter of 1998 of between 8 and 11 cents per share for the acquisition.
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