Cisco will acquire an 80-percent stake of data centre company Nuova Systems. The networking giant has made a US$50-million investment into Nuova.

Nuova will become a majority-owned subsidiary of Cisco, with a view to further developing Cisco's data centre products.

Cisco retained the possibility of investing a further $42 million, along with the option of purchasing the remaining 20 percent 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.