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Logitech to Acquire Video Conferencing Firm for $405 Million


November 12, 2009

In yet another sign of industry consolidation, Logitech International, a Switzerland-based provider of PC video communication technology, announced it plans to acquire LifeSize Communications a provider of high definition video communication solutions, for $405 million.

 
The acquisition will help Logitech expand its PC video business beyond the desktop with HD video conferencing, Gerald P. Quindlen, Logitech president and CEO said. In addition, it will give Logitech access to LifeSize's 9,000 video-conferencing customers worldwide.
 
 “Together we can make life-like, HD-quality video communication as mainstream and seamless as a telephone, for meeting participants in the boardroom, at their office desk, in a remote-location meeting room, telecommuting from home or on the go with a laptop,” Quindlen said in a statement.
 
Under the deal, Logitech and LifeSize plan to build new relationships with unified communications, collaboration and VoIP industry partners to bolster the development of an open eco-system for interoperable video communication, officials said. The two companies also plan to fuel video communication growth by using their combined technology expertise and Logitech’s manufacturing and supply chain operations and R&D.
 
Those familiar with Logitech know the company best for its keyboards, webcams and mice. With the acquisition, Logitech can now tap into LifeSize's enterprise customers, company officials said.
 
“We believe that together with Logitech, we can realize that vision for all enterprises – private and public – and small and medium businesses,” Craig Malloy, LifeSize co-founder and CEO, said in a statement. “Our combined proven innovation can accelerate mainstream adoption of video communication by anyone, anywhere.”
 
LifeSize, which has 300 employees worldwide, will continue to operate as a separate division at its Austin, Texas location. Malloy will remain CEO and will report to Quindlen. The company expects to bring in about $90 million in revenue this year, according to company officials.
 
The acquisition is slated to close in December.
 
The news comes on the heels of Cisco Systems Inc., the world’s largest maker of computer networking gear, announcement last month that it intends to acquire TANDBERG, a Norway-based company, for about $3 billion. With the purchase, Cisco plans to integrate TANDBERG’s video endpoints and network infrastructure solution into its collaboration architecture, allowing intercompany and multi-vendor interoperability across its product portfolio. Cisco officials said the purchase would help strengthen the company’s position in the $34 million collaboration market and expand its presence as a player in the video conferencing sector.
 
The proposed deal, which has been endorsed by TANDBERG board of directors, is expected to close in the first half of 2010.

Some industry experts said that merger would likely toughen the video conferencing playing field, which TANDBERG and Polycom have largely dominated. But others, including BrightCom, a Huntington Beach, Calif.-based provider of integrated telepresence and video conferencing solutions, called the Cisco and TANDBERG merger good news.
 
Bob McCandless, CEO of BrightCom, told unified communications in a recent interview that the merger would elevate BrightCom’s positioning in the industry, as well as benefit customers. For example, customers would be able to select products from multiple vendors as opposed to being locked into a single non-standardized vendor solution, he said.
 

Amy Tierney is a Web editor for unified communications, covering business communications Her areas of focus include conferencing, SIP, Fax over IP, unified communications and telepresence. Amy also writes about education and healthcare technology, overseeing production of e-Newsletters on those topics as well as communications solutions and UC. To read more of Amy's articles, please visit her columnist page.

Edited by Amy Tierney




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