Expects to strengthen its position in video communications market
Network equipment maker Cisco has agreed to acquire video conferencing firm Tandberg for $3 billion, in a bid to strengthen its position in the video communications market.
Based in Oslo, Norway, and New York, Tandberg is a provider of video communications products, including a range of video endpoint and network infrastructure.
Cisco said that the acquisition will expand its collaboration portfolio to provide more offerings to a greater number of customers, further accelerating market adoption globally.
Under the terms of the agreement, Cisco will commence a cash tender offer to purchase all the outstanding shares of Tandberg for 153.5 Norwegian Kroner per share for an aggregate purchase price of approximately $3.0 billion. This represents a 25.2% premium to the 3-month volume weighted average closing price for Tandberg’s stock. The proposal has already been recommended unanimously by Tandberg’s board.
Upon completion of the transaction, Tandberg video endpoints and network infrastructure offerings will be integrated into Cisco’s collaboration architecture, which is expected to enable the intercompany and multi-vendor interoperability across the full product portfolio – from desktop to immersive, multi-screen TelePresence.
After the deal is done, Tandberg’s CEO Fredrik Halvorsen will lead the new TelePresence Technology Group, reporting to Marthin De Beer, senior vice president of Cisco’s emerging technologies group.
John Chambers, chairman and chief executive officer of Cisco, said: Cisco and Tandberg have remarkably similar cultures and a shared vision to change the way the world works through collaboration and video communications technologies. Collaboration is a $34 billion market and is growing rapidly – enabled by networked Web 2.0 technologies. This acquisition showcases Cisco’s financial strength and ability to quickly capture key market transitions for growth.
The acquisition is expected to close during the first half of calendar year 2010. However, the close date is subject to customary closing conditions, including regulatory review in the US and elsewhere. Cisco expects the acquisition to be accretive to its non-GAAP earnings in fiscal year 2011.