Cisco Systems, Inc. (Nasdaq: CSCO) said Wednesday it will acquire

Reactivity, Inc., a specialized network hardware provider, for $135 million in cash.

San Jose-Calif.-based Cisco, the top network equipment company, will use XML (extensible markup language) gateway provider technology from Reactivity to expand its Application Networking Services unit. That business segment creates products that inspect network data, and route messages accordingly.

Reactivity together with our Application Control Engine (ACE) provides a highly capable solution for customers' application delivery needs in the data center, said Jayshree Ullal, Senior Vice President, Datacenter Switching and Security Technology Group (DSSTG).

The private firm makes hardware and software to help companies deploy, control and increase the amount of XML traffic they have throughout their network.

Reactivity was founded in 1998 and has 56 employees in Redwood City, Calif. Upon close of the transaction, the Reactivity team and products will be integrated into DSSTG.

Shares of Cisco fell slightly by 1.16 percent, or 32 cents to $27.34 in early afternoon trading on the Nasdaq Stock Market.