Cisco acquires Nuova through data center investment

Cisco will acquire an 80% stake of data center company Nuova Systems through a $50 million investment, the networking company said Thursday.

Nuova will become a majority-owned subsidiary of Cisco, with a view to further developing Cisco's data center products. Cisco retained the possibility of investing a further $42 million, along with the option of purchasing the remaining 20% of Nuova, which it said it may do late in its 2008 fiscal year or early fiscal 2009.

The final price of the remaining stake would be determined based on the performance of Nuova's products, Cisco said, but would be at least $10 million and a maximum of $578 million.

Nuova's founders include former Cisco senior vice president and chief development officer Mario Mazzola. He will remain with Nuova after the transaction.

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