11/21/2005 -- As of last week, Cisco Systems Inc. is coming to a television set-top box near you. On Friday, the networking giant announced a definitive agreement to acquire Scientific-Atlanta Inc., one of the largest manufacturers of cable television set-top boxes.

Scientific-Atlanta, founded in 1951, has more than 7,500 employees reported fiscal year 2005 revenues of $1.91 billion. And at an aggregate purchase price of $6.3 billion, it doesn’t come cheap. In fact, it’s Cisco’s largest acquisition in six years. In 1999, the networking giant ponied up $7.29 billion for Cerent Corp. But that was in 1999 –- at the height of the dot.com boom, when common sense in general was missing-in-action and Cisco in particular was surging toward a record market capitalization.

"Video is emerging as the key strategic application in the service provider triple-play bundle of consumer entertainment, communication and online services," said John Chambers, president and chief executive officer of Cisco Systems, in a statement. "The combination of Cisco and Scientific-Atlanta brings unmatched experience and innovation in delivering large-scale video systems and networks, and the addition of Scientific-Atlanta further extends Cisco's commitment to and leadership in the service provider market."

Following the close of the transaction, Scientific-Atlanta will become a division of Cisco’s Routing and Service Provider Technology Group, which is currently helmed by senior vice-president Mike Volpi. At that time, Scientific-Atlanta chairman and chief executive officer Jim McDonald will report directly to Volpi.

Until then, Cisco and Scientific-Atlanta will operate as separate businesses and will continue to work with existing partners. -Stephen Swoyer