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Cisco’s 2000 Qeyton Acquisition: What It Bought and Why

Cisco’s 2000 acquisition of Qeyton brought metro DWDM technology into its optical-networking plans, targeting more service-provider capacity over existing fiber.
From TheFinanceBase Team2 min to read
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Cisco announced its acquisition of Stockholm-based Qeyton Systems on May 12, 2000, for approximately $800 million in Cisco common stock; the deal closed on June 16. Qeyton brought Cisco metropolitan dense wavelength-division multiplexing technology designed to increase capacity on service-provider networks without adding or leasing metro fiber.

What Cisco acquired

Qeyton Systems was a privately held company founded in 1998 and based in Stockholm. Cisco said it had 52 employees when the acquisition was announced. Its core contribution was Metropolitan Dense Wave Division Multiplexing (MDWDM), a form of dense wavelength-division multiplexing (DWDM) aimed at metropolitan networks operated by service providers. (Cisco announcement, May 12, 2000)

DWDM carries multiple wavelengths—often described as colors of light—over the same optical fiber. Qeyton’s metro system was intended to connect carrier points of presence (POPs) and customer sites over an optical ring, adding capacity without requiring providers to install or lease additional metro fiber. (Cisco announcement, May 12, 2000; Cisco product information)

Deal terms and timeline

Milestone Details
Announcement May 12, 2000: Cisco announced a definitive agreement to acquire Qeyton. (Cisco)
Consideration Approximately $800 million in Cisco common stock, as announced in 2000. (Cisco; Cisco transaction filing)
Expected closing Cisco expected completion in fiscal fourth quarter 2000, subject to customary conditions, including Hart-Scott-Rodino review. (Cisco)
Completion June 16, 2000; Cisco said the transaction was accounted for using purchase accounting. (Cisco completion announcement)

Why the acquisition mattered to Cisco

Cisco framed the purchase as an expansion of its optical-networking capabilities, with the goal of offering service providers an end-to-end optical solution for metropolitan networks. Qeyton’s technology addressed a specific capacity problem: how to carry more traffic between metro locations over existing fiber rather than building or leasing more. (Cisco announcement, May 12, 2000; Cisco product information)

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Cisco planned to integrate Qeyton’s technology into its Optical Networking Solutions (ONS) 15000 family and place it within Cisco’s optical networking group in the service-provider line of business. The announcement described Qeyton CEO Claes Rickeby as continuing to lead the Stockholm operation, reporting to Geraint Anderson, general manager of Cisco’s Photonics Business Unit. (Cisco announcement, May 12, 2000)

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What the announced price means

The approximately $800 million figure was the announced value of consideration in Cisco common stock, not a stated cash payment. Cisco’s June completion notice said it used purchase accounting. These figures describe the transaction as reported in 2000; they do not by themselves establish Qeyton’s later product life, present-day availability, or the acquisition’s realized financial return. (Cisco announcement; Cisco completion announcement)

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