Cisco Buys Two Virtual Private Network Firms

Cisco Systems

(CSCO) - Get Report

expanded its powerful presence in the Internet construction business Wednesday with the purchase of two virtual private network companies in stock deals totaling $567 million.

The purchases by Cisco, a leading maker of equipment that powers the Internet, are meant to enhance the company's own virtual private network business, which allows companies to transmit information to a secure location on the Internet.

Cisco shares were up 1/16 at 112 1/8 in midafternoon trading Wednesday. (Cisco closed up 1/4, or 0.22%, at 112 5/16.)

The San Jose, Calif.-based company has been expanding through a steady stream of acquisitions and alliances. On Tuesday Cisco announced plans to purchase a large tract of land in Massachusetts to construct a campus that will help accommodate its increased size.

Under the terms of the agreements announced Wednesday, Cisco will acquire privately held

Altiga Networks

of Franklin, Mass., and

Compatible Systems

of Boulder, Colo., in deals that are expected to close in the third quarter.

Both acquisitions have been approved by the board of directors of each company and are subject to various closing conditions.