Cisco Tuesday announced it has agreed to acquire Sheer Networks, which makes software designed to help service providers and large enterprises manage complex networks.

Cisco will pay approximately $97 million in cash and assumed options for the privately held company, which is based in San Jose. The price my increase by up to $25 million if Sheer Networks reaches certain development and product milestones, Cisco said.

Sheer Networks makes a product called Sheer DNA, or Dynamic Network Abstraction, which creates a real-time, virtual representation of an actual network. This is supposed to make it easier to manage complex networks that include multiple domains and equipment from multiple vendors.

The acquisition will flesh out Cisco's network management offerings for service providers and large businesses, Cisco said. It plans to build on Sheer Networks' technology to develop device, network and service-level management applications that work with multi-vendor networks, it said.

Sheer Networks' staff will become part of Cisco's Network Management Technology Group. The company was founded in 1999 and has 100 employees in San Jose and in Petach Tikva, Israel.

The deal is subject to standard closing conditions. Cisco expects it to be wrapped up in the first quarter of its 2006 fiscal year, which ends Oct. 30, 2005.

The IDG News Service is a Network World affiliate.