Compaq agrees to acquire NetWorth in move to expand network business
Article Abstract:
Compaq announced its intention to acquire computer network hub manufacturer NetWorth Inc for $372 million, a move that furthers Compaq's aggressive push in the network server market. NetWorth manufactures Fast Ethernet network hubs and network adapters. The sale price of $372 million is seven times NetWorth's earning of $55 million for the fiscal year ended Jun 30, 1995. The acquisition has the blessing of NetWorth's founder and CEO John McHale, who will become a VP at Compaq. The sale was applauded by analysts despite the price because Compaq's distribution network will significantly expand NetWorth's exposure. Compaq's network server business has a 41% market share. Server sales are important for Compaq because they have higher margins than PCs. Servers represented only about 5% of Compaq total unit shipments, but they produce almost one third of the company's profit.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1995
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Cisco Systems will acquire StrataCom, computer switch maker, for $4 billion; high premium for target spotlights fast growth of network hardware
Article Abstract:
Cisco Systems signs an agreement to acquire StrataCom for $4 billion, making the merger between networking hardware companies one of the largest in the history of the computer industry. The $4 billion is 76-times higher than StrataCom's 1995 net income of $52.5 million, an indication of the expected growth in the computer communications equipment industry. Analysts attribute a majority of the growth to the need to improve network connection speeds caused by the increasing interest in the Internet as well as corporate intranets. The acquisition is expected to allow Cisco to solidify its position as the leading networking hardware provider, giving the hub, switch and router manufacturer an additional edge in frame relay technology.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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The quiet man who put sizzle in the Cisco deal
Article Abstract:
Kleiner, Perkins Caufield & Byers partner Vinod Khosla started Cerent Corp. in 1996, functioning as CEO for 1 1/2 years. Yesterday, Cisco Systems Corp.announced it was buying Cerent for $6.9 bil. Kleiner Perkins 30% stake in Cerent, purchased for $8 mil is now worth $2 bil. Mr. Khosla was also behind Kleiner Perkins' interest in Juniper Networks Inc., which, from a smaller outlay, is also valued at $2 bil. He also was involved with the founding of Excite Inc. Some of Mr. Khosla's less successful investments were in Go Corp. and 3DO Co.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1999
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