has made a $66million cash purchase of
, aimingto double its revenue in the local area networkswitch market. Switches help direct network traffic.
In a statement, Vitesse CEO Lou Tomasetta calledthe buy a "natural combination for both companies."The two companies have been jointly selling gigabitspeed switches for more than a year, based onVitesse's LAN switches and Cicada's gigabit Ethernetcopper transceivers.
The deal is slated to close in the first calendarquarter of 2004, subject to approval by Cicadashareholders. Cicada is privately held.
Vitesse said the purchase will be neutral to itspro forma earnings in the first half of calendar year2004 and will start to add to earnings in the secondhalf. It hasn't yet determined the size ofacquisition-related charges, or when it will recordthose charges.
Cicada products are expected to contribute around$10 million to Vitesse revenue in 2004. Most ofthose sales should take place in the second half of the year, whenVitesse believes customers will upgrade their networksto gigabit Ethernet speeds.
Shortly before 11 a.m. EST, shares of Vitesse were up 2cents, or 0.3%, to $6.02.