Cisco acquires Allegro

Cisco Systems has agreed to acquire Allegro Systems, a start-up developing VPN acceleration technology, in an all-stock transaction valued at $181m.

Cisco has targeted Allegro's technologies to improve the performance of its existing VPN and security products.

Part of the deal will see Cisco taking on Allegro's 39 employees to develop security for corporate customers to safely connect their employees and customers remotely over corporate networks and the internet.

In addition, Allegro's technology will be used to enhance the Safe security blueprint for Cisco's architecture for voice, video and integrated data (AVVID) network infrastructure.

The Allegro acquisition is the second for Cisco this year, following several purchases of technology companies in 1999 and 2000. Cisco cut back on buy-outs following the financial troubles that struck the whole sector in the first quarter.

The company acquired AuroraNetics, a metropolitan network technology company, for $150m in stock earlier this month.

Cisco and Allegro boards have approved the deal and it is expected to close by October.