Cisco to buy WiMax startup Navini for $330 million

October 23, 2007: 9:00 AM ET
Navini Ripwave MX
Navini's technology helps focus WiMax transmissions to make them more effective. Above, the company's Ripwave MX modem. Image: Navini Networks

Cisco Systems (CSCO) announced today that it will purchase wireless networking startup Navini Networks for $330 million in cash and stock, the Silicon Valley giant's first major bet on the nascent WiMax technology.

WiMax, which some have described as "WiFi on steroids," is similar to the popular home networking standard in that it allows data to be transmitted over the air. But while WiFi typically has a range of a few hundred feet, WiMax can move data over distances of five miles or more.

Cisco says the Navini acquisition will mainly help the company compete in emerging markets overseas. In developing countries that don't already have extensive systems of phone lines and fiber optic cables, WiMax promises to provide a cheaper way to quickly set up fast data networks. Rather than go through the costly process of running wires from building to building, telecommunications providers can use WiMax to beam signals across vast areas.

Cisco's move to acquire Navini puts another strong tech industry player behind WiMax, a standard that has backing from chipmaker Intel (INTC), carrier Sprint (S) and others. Navini is known for its "Smart Beamforming" technology that improves the performance and range of WiMax signals.

Cisco expects the transaction to close in the second quarter of its 2008 fiscal year. Navini has 260 employees. Larry Lang, vice president and general manager of Cisco's mobility, signaling and control business unit, said a convenient aspect of the acquisition is that Cisco already has development centers near Navini's two locations in Richardson, Texas, and in Bangalore.

Navini had raised more than $165 million in venture capital in recent years, according to its Web site. Intel Capital, Lehman Brothers (LEH), Sequoia Capital and Granite Ventures are listed among Navini's investors.

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