Cisco is purchasing the remaining 20 percent interest in San Jose-based Nuova Systems, which is a start up company that designs products for the data center market.

Prior to the acquisition, Nuova operated as a majority-owned subsidiary of Cisco, which had invested $70 million for its 80 percent ownership stake.

Cisco announced its initial investment in Nuova in August 2006 and announced an amendment to the agreement in April 2007 that expanded the development scope, increased the funding commitment and raised the maximum potential payout of the transaction to $678 million.

The final Nuova transaction is success-based with the total value primarily determined by the revenue of Nuova products over three measurement periods. The first measurement period will begin in early fiscal year 2010, the second measurement period will start in late fiscal year 2010, and the third measurement period will commence in mid fiscal year 2011.

Cisco also introduced the Cisco Nexus 5000 Series, the first product developed by Nuova. The Cisco Nexus 5000 is a 10 Gigabit Ethernet "top-of-rack" switch that offers unified fabric capabilities through the support for multiple data center networking protocols and software intelligence, according to Cisco.

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