Intelligent Information Systems

(Nasdaq:IISLF) today announced that its subsidiary

StoreAge

has completed a $25 million private placement, at a post-money company value of $65 million. News just as good is that giant

Cisco Systems

(Nasdaq:CSCO) has joined its list of investors.

StoreAge completed the first round of its placement, which came to $14 million, in December.

IIS itself invested $4.2 million in the current round, maintaining its holding in the company at 39%. Other investors are

Genesis Partners

, Ophir Holdings (and through it

TheStreet Recommends

Poalim Investments

) and

Ampal American Israel Corporation

(Nasdaq:AMPL) and, as said, Cisco Systems. Another newcomer is investment house

Morgan Keegan

(NYSE:MOR).

An additional new stockowner is Challenge venture capital fund, which put up $1.5 million.

StoreAge develops data storage solutions and focuses on storage area networks and storage virtualization management architectures, a crucial sector for developing and setting up SAN type storage environments.

One of the few sectors over which Cisco does not hold sway is the storage sector, says Eddie Shalev, a managing partner in Genesis Partners. StoreAge has a line of products complementing Cisco's, and there's business cooperation between the two companies it's a strategic investment.

Shalev says Morgan Keegan is indeed a very small investment house, but says it developed some expertise in the storage sector. It has very strong analytical abilities in this sector, and has built quite a reputation. They asked to lead the placement, and we agreed to accept an investment.

StoreAge's management originally hoped to complete the current round at a $100 million company valuation. But its hopes were shot down by the crisis in the hi-tech and venture capital markets. Still, its valuation of $65 million is very impressive valuation for such a young company that hasn't made one red cent in revenue yet, and considering that its previous placement - concluded in January 2000 - was held at a post-money company valuation of $8 million.