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Cisco Systems to Acquire KiSS Technology A/S (29/7/2005)

Cisco-Linksys Division to Develop Unique Networked Entertainment Products for the Consumer

Cisco Systems(R) (Nasdaq:CSCO) today announced a definitive agreement to acquire privately-held KiSS Technology A/S of Horsholm, Denmark. This represents Cisco's second acquisition for its Linksys(R) division, the recognized leading provider of VoIP, wireless and networking hardware for home, Small Office/Home Office (SOHO) and small business environments. KiSS is a leading technology provider for networked entertainment devices and has a product portfolio that includes home video products such as networked DVD players and networked DVD recorders. KiSS's technology platform also has the capability to extend to other consumer electronics products and will help Linksys develop a unique, networked entertainment product suite.

Under the terms of the agreement, Cisco will pay approximately $61 million in cash and stock in exchange for all shares of KiSS Technology. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the first quarter of Cisco's fiscal year 2006.

"As more and more entertainment content is delivered over the Internet and as consumers demand access to digital entertainment inside and outside of their home networks, networked entertainment devices will become an integral part of Consumer Electronics," said Charles Giancarlo, Cisco Chief Technology Officer and Cisco-Linksys president. "KiSS has emerged as a leader in networked video and audio products in Europe and we hope to use that expertise to expand worldwide."

According to In-Stat, a leading market research firm, the networked entertainment market had reached $3.9 billion in revenue world wide at the end of 2004 and is expected to grow to $16.1 billion by 2009. In-Stat also estimates that networked entertainment devices will be in use on more than 38% of home networks by the same period.

KiSS's leading technology platform allows for easy integration to a consumer's home network allowing devices to access content on the Internet or on other devices on their home network. Its standards-based approach contributes to interoperability across platforms and product categories. In addition to enhancing ease of use and customer satisfaction, this interoperability will create opportunities for collaboration with other manufacturers and content providers.

This acquisition follows Cisco's core strategy of using acquisitions to build new technologies and speed time-to-market for its products. The KiSS acquisition accelerates Linksys' leadership in the emerging market for networked entertainment products and will provide Linksys with valuable technology, intellectual property, and customers. The addition of KiSS's employees will provide Linksys with a dedicated, world-class development team focused exclusively on the networked entertainment market and will also aid in creating a foundation for Linksys' internal R&D capabilities.

Linksys will continue to support and sell KiSS's existing products in Europe. Over time Linksys also plans to develop a suite of targeted products for other world markets.

KiSS was founded in 1994 and has 65 employees. Upon close of the acquisition, the KiSS team will be integrated into Linksys.

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