14 DAY TRIAL // The economy may not exactly be roaring back to life but it does look like it's picking up slightly if only from the wave of big acquisitions lately. Cisco is the latest to the party as it announces it has bought Norwegian video conferencing company Tandberg for $3 billion, a nice plump sum for this type of company. The deal has been approved by Tandberg's board of directors and is expected to close next year.
"Cisco and Tandberg have remarkably similar cultures and a shared vision to change the way the world works through collaboration and video communications technologies," Cisco Chairman and CEO, John Chambers, said. "Collaboration is a $34 billion market and is growing rapidly – enabled by networked Web 2.0 technologies."
Cisco sells a variety of networking and communications solutions all the way up to room-sized video conferencing systems, called TelePresence, for enterprises, which allows them to have a virtual conference room. The systems cost several hundred thousand dollars a piece but the companies choose them as they cut down on travel costs. Tandberg sells similar solutions but also smaller systems with similar conferencing functions. It also has several software solutions for video conference management and interoperability between systems from different vendors.
"Cisco and Tandberg share a vision of changing the way people communicate and collaborate," Tandberg CEO, Fredrik Halvorsen, said. "This transaction is a vote of confidence, not just in Tandberg but in our technology and our people. The combination of world-class technologies, Cisco's global scale, and exceptional people from both organizations will enable us to accelerate innovation and market adoption."
Cisco offers to buy all available shares of the Norwegian company for an 11 percent premium over the closing price yesterday and a 25 percent premium over the average closing price for the past three months. The offer ads up to $3.0 billion for the tech company, which managed to generate $809 million in revenue last year. Tandberg also has close to $200 million in cash. The acquisition continues a series of similar deals from Cisco, which is investing in technologies that create large amounts of Internet traffic, benefiting its main networking hardware business.