And why were Dante Malagrino of Cisco and Ed Bugnion of Nuova Systems jointly featured in the video presentation of Cisco Nexus 5000 we shared earlier today?
Start-up Nuova Systems operated as a majority-owned subsidiary of Cisco, which had invested $70 million and owned 80 % of the company. Cisco announced its initial investment in Nuova in August 2006 and announced an amendment to the agreement in April 2007 that expanded the development scope, increased the funding commitment and raised the maximum potential payout of the transaction to $678 million. And now Cisco has formally expressed its intent to acquire remaining interest in the company.
From the press release:
“Cisco today announced its intent to purchase the remaining 20 % interest in San Jose-based Nuova Systems, a start up focused on the development of next-generation products for the data center market. Cisco today also introduced the Cisco Nexus 5000 Series, the first product developed by Nuova. The Cisco Nexus 5000 is a 10 Gigabit Ethernet “top-of-rack” switch that offers unified fabric capabilities through the support for multiple data center networking protocols and software intelligence.”
The Nuova transaction is success-based with the total value primarily determined by the revenue of Nuova products over three measurement periods. The first measurement period will commence in early fiscal year 2010, the second measurement period will commence in late fiscal year 2010, and the third measurement period will commence in mid fiscal year 2011. The acquisition is expected to close in Q4 of Cisco’s FY 2008. It will be acquisition No. 126 for Cisco overall and the fifth one in FY ’08.
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