Cisco Nabs NetSolve

Cisco Systems Inc. (Nasdaq: CSCO) announced this afternoon it will pay $11 a share for NetSolve Inc. (Nasdaq: NTSL), a 290-plus-employee IT infrastructure provider.

Cisco will pay about $128.37 million for the company, which is public and has about 11.67 million outstanding shares. The acquisition of NetSolve is subject to NetSolve shareholder approval and regulatory approval, and is expected to close in the second quarter of Cisco's fiscal year 2005.

NetSolve operates all facets of an enterprise IT network for its customers -- including monitoring, fault diagnosis, fault resolution, and performance management and reporting. The company provides its IT infrastructure management services remotely 24 hours a day, 365 days a year, from its Network Management Center in Austin, Texas.

The company has 35,000 managed sites in 75 countries, giving Cisco a wide base of accounts through which to push its gear.

NetSolve's target customer has traditionally been the middle market enterprise -- companies that have between 100 and 1,000 employees and annual revenues between $25 million and $500 million.The acquisition also marks Cisco's increasing interest in the services space -- a move that puts it selling against Electronic Data Systems Corp. (EDS) (NYSE: EDS), IBM Corp. (NYSE: IBM), Hewlett-Packard Co. (NYSE: HPQ), McAfee Inc. (NYSE: MFE), and corporate IT departments everywhere. Several NetSolve resellers -- AT&T Corp. (NYSE: T), HP, and IBM, in particular -- also sell IT management services that compete with NetSolve's.

Phil Harvey, News Editor, Light Reading