Cisco Systems to Acquire Arroyo Video Solutions

SAN JOSE, Calif. - Cisco Systems entered a definitive agreement to acquire privately-held Arroyo Video Solutions, Inc., a provider of next-generation solutions for on-demand television and related consumer services.

The Arroyo solution offers a platform for video-on-demand and will offer emerging time-shifted services in the future. The integration of the Arroyo platform into the Cisco IP-NGN (Next Generation Network) architectural framework will help enable carriers to accelerate the creation and distribution of network delivered entertainment, interactive media and advertising services across the growing portfolio of televisions, personal computers, mobile handsets and emerging media capable devices.

Joining Cisco from Arroyo will be a technical team including Drew Major, an original founder of Novell. Also joining is Paul Sherer, former chief technology officer at 3Com and key contributor to a portfolio of networking patents and technologies. Arroyo was founded in 2002 and has 44 employees based in California and Utah.

Under the terms of the agreement, Cisco will pay approximately $92 million in cash. 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 2007, ending October 31, 2006.

Upon close of the transaction the Arroyo team and product portfolio will be integrated into the Cisco Cable & Video Initiatives Group, within the Service Provider organization led by Volpi.