Cisco this week announced a definitive agreement to acquire the intellectual property, a majority of the engineering team and select assets from privately held Procket Networks, a maker of routers and routing technology, for $89 million in cash.

Procket has expertise in routing silicon and software development. Cisco says the purchase -- first reported by Network World last week -- will add a "rich intellectual property portfolio" and a team of "proven" silicon and software architects to Cisco's own routing technology and products.

"The addition of Procket's engineering team to Cisco offers a unique opportunity to accelerate development of silicon and software across Cisco's next generation routing portfolio," said Mike Volpi, Cisco senior vice president and general manager of the Routing Technology Group, in a statement. "Procket has some of the world's foremost designers of sophisticated silicon, software, and network systems with an average of over 15 years of experience in their respective industries. Adding this talent to Cisco's world-class engineering team will help drive continued innovation in network infrastructure."

Cisco inherits 120 to 130 engineers, Volpi says.

Procket began entertaining offers a couple of months ago after it fell $20 million short in its latest round of funding earlier this year, says President and CEO Roland Acra.

"We were contemplating a cash picture that was a pretty short runway," he says. Cisco's offer was the firmest after discussions with "several dozen people," Acra says.

The deal is a curious one, however. Procket was an emerging competitor to Cisco in core routing with the introduction of its PRO/8800 router last year. Procket had garnered about 2% of the 10G bit/sec routing market in the first quarter of 2004, according to Dell'Oro Group.

A Cisco spokesman says Cisco is not acquiring Procket products, customer contracts, liabilities, debts or real estate.

And Cisco just announced its own next-generation core router, the CRS-1, amidst much fanfare three weeks ago. Cisco heralded the CRS-1's arrival as the beginning of a new era of homegrown routing innovation for the 20-year-old company. The CRS-1 took four years and $500 million for Cisco to develop, and features 40G bit/sec silicon packet processors (SPP) co-developed with IBM, as well as the modular IOS-XR operating system with a kernel acquired from QNX Software Systems of Ottawa.