Cisco to Acquire SignalWorks

SAN JOSE, Calif. -- Cisco Systems, Inc., today announced a definitive agreement to acquire privately-held SignalWorks, Inc. of Mountain View, Calif., a developer of advanced software that delivers high-performance audio capabilities for IP telephony systems. The acquisition advances Cisco's leadership in the fast-growing global IP (Internet Protocol) telephony market, which is expected to increase from approximately $900 million in 2002 to $4.3 billion in 2006 (Synergy Research Group). Under the terms of the agreement, Cisco common stock, worth an aggregate value of approximately $13.5 million, will be exchanged for all outstanding shares and options of SignalWorks. The acquisition of SignalWorks is expected to close by the fourth quarter of Cisco's Fiscal Year 2003. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions. "The acquisition of SignalWorks reinforces Cisco's continued commitment to leadership in IP telephony," said Marthin De Beer, vice president and general manager of Cisco's Enterprise Voice and Video Business Unit. "The SignalWorks core technology team is comprised of seasoned industry veterans with many years of experience in voice and digital signal processing, and the integration of SignalWorks' voice technology with Cisco's market-leading IP telephony product portfolio will drive continued innovation and performance differentiation for Cisco. Ultimately, this acquisition will allow Cisco to attract new small business, enterprise and service provider customers." SignalWorks' Acoustic Echo Canceller (AEC) software, which provides unparalleled voice clarity, is a digital full duplex, voice-processing algorithm that will drive continued product innovation and differentiation across Cisco's complete line of IP phones and IP softphones. Already deployed in Cisco IP phones used by several Fortune-500 companies, SignalWorks' AEC software delivers advanced audio features, such as multiple microphone capabilities, stereo sound, and PC-based softphones, providing the basis for the future expansion of Cisco's IP phone product line into new high-end markets. This advanced audio and speakerphone capability will allow Cisco to further penetrate the enterprise, small- and medium-sized business, and service provider managed services markets. SignalWorks was founded in 1994. SignalWorks' employees will join Cisco's Voice Technology Group under the leadership of Don Proctor, vice president and general manager of Cisco's Voice Technology Group. Cisco Systems Inc.