Cisco Systems, Inc. Announces Agreement to Acquire SyPixx Networks; Delivering an Intelligent Converged Environment for Video Surveillance.

SAN JOSE, Calif. -- Cisco Systems(R) (NASDAQ:CSCO) today announced a definitive agreement to acquire privately-held SyPixx Networks, Inc. of Waterbury, Connecticut. SyPixx Networks offers network-centric video surveillance software and hardware that enable existing analog video surveillance systems to operate as part of an open IP network. This acquisition will enable Cisco to deliver video surveillance as part of an Intelligent Converged Environment.

Now Cisco will make it possible for customers to continue using their existing video surveillance systems and to integrate them into an overall physical security program, while enhancing the safety of people and the protection of assets. Video will be accessible at any time from any place, enabling real time incident response, investigation and resolution. This will support the deployment and control of new security applications and maximize the value of live and recorded video.

As a result of this acquisition, Physical Security will become a new Emerging Technology area for Cisco.

Under the terms of the agreement, Cisco will pay approximately $51 million in cash and options for SyPixx. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the third quarter of Cisco's fiscal year 2006 ending April 28, 2006.

"To address evolving security threats, a complete security system requires flexibility, reliability, and a platform upon which innovative new applications can be developed and deployed. With the Self Defending Network strategy, Cisco has already shown that an IP network can be a platform for helping to protect a company's information and digital assets," said Marthin De Beer, Vice President of Cisco's Emerging Market Technologies Group. "Through the acquisition of SyPixx, Cisco will begin to show how the network can also be a platform for enhancing the safety of people and the protection of physical assets."

Complementing Cisco's expertise in securely supporting mission critical voice, video and data over an intelligent IP network, the SyPixx portfolio includes analog to digital (IP) video camera encoders, digital (IP) to analog video monitor decoders, analog video transmission equipment, video recording and management software and servers. SyPixx was founded in 2004 and has 27 employees in Waterbury, Connecticut; Carlsbad, California; and Scottsdale, Arizona.

Upon close of the transaction, SyPixx video surveillance products will be part of a new business unit in Cisco's Emerging Markets Technology Group, reporting to De Beer.

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