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Cisco's amazing $3B buy of videoconf. vendor Tandberg
Cisco is set to acquire Tandberg, a Norwegian manufacturer of videoconferencing systems. $3 billion is a lot of money in today's economy, and values Tandberg significantly higher than the market. In IT Blogwatch, bloggers wonder if this means the recession is well and truly behind us.
Your humble blogwatcher selected these bloggy morsels for your enjoyment. Not to mention an unusual birthday card...
Ashlee Vance was up late last night:
Cisco Systems continued to show just how serious it is about video conferencing, announcing ... the $3 billion acquisition of Tandberg, a Norwegian video communications company. Cisco [sells] expensive, room-sized video conferencing systems. ... Tandberg ... also sells smaller-sized, cheaper conferencing units. In addition, Tandberg has specialized [management] software ... and [a gateway product] for creating connections between conferencing systems that rely on different underlying technology.
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Ciscos corporate video conferencing products require the company to outfit a customers conference room with multiple, large displays, networking equipment and even special tables, chairs and wall paint. By contrast, Tandberg has a range of gear, including high-definition video systems that can sit on desks or be used with personal computers.
Show me the money, Joseph Woelfel:
Cisco ... plans to begin a tender offer to buy Tandberg for 153.5 Norwegian kroner a share ($26.49), or just under $3 billion. The price is an 11% premium to Tandberg's closing stock price Wednesday, and a premium of more than 25% to Tandberg's average closing price over the last three months.
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The proposal was recommended unanimously by Tandberg's board.
Dean Takahashi sounds astonished:
The heady days of acquisitions are back. Cisco Systems said today it is buying Norways Tandberg video communications business for $3 billion. Thats a huge amount of money that Cisco is laying out for a video conferencing firm. ...The deal could put pressure on Hewlett-Packard, which makes its own Halo video conferencing rooms.
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Cisco has bought 40 companies over the past five years. ... In the past week, merger mania has erupted, with Dell buying Perot Systems for $3.9 billion and Xerox buying ACS for $6.4 billion.
G'day, Nadia Cameron:
The deal represents yet another step in Ciscos plans to dominate the video communications market. In March, the networking giant acquired digital video vendor, Flip.
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The acquisition is expected to close during the first half of next year but is subject to closing conditions as well as regulatory reviews in the US and elsewhere. ... Cisco said it planned to integrate Tandbergs video endpoints and network infrastructure solution into its collaboration architecture.
Because Ben Worthen is worth it:
High-end telepresence is still a small market, with world-wide sales of the big, multiscreen systems that Cisco specializes in still less than $500 million a year. ... But it's one of the few technologies that has benefited from the recession, growing 30% from last year as businesses look to reduce travel expenses.
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Cisco has vowed to use its cash to grow while rivals struggle in the recession.
Eric Savitz muzez:
It will be interesting to see how the deal affects shares of Polycom, Tandbergs primary rival.
Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, he is also an analyst at Ferris Research. You can follow him as @richi on Twitter, or richij on FriendFeed, pretend to be richij's friend on Facebook, or just use good old email: itblogwatch@richij.com.
