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11/11/2009
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Logitech To Acquire Video Communications Vendor

The $405 million purchase of LifeSize would give Logitech entry into the growing corporate videoconferencing market.

Logitech International plans to acquire video communications company LifeSize for $405 million, a move that would expand Logitech's portfolio from video-calling on the PC to videoconferencing in the corporate meeting room.

Logitech said it would operate LifeSize as a separate division based in Austin, Texas, which is the home of LifeSize's current headquarters. The division would be led by LifeSize chief executive Craig Malloy. The cash transaction is expected to close in December, pending approval from regulators.

Besides technology, LifeSize would bring to Logitech more than 9,000 videoconferencing customers across 80 countries. The privately held company counts large corporations and small and medium-sized businesses as customers, as well as organizations in public healthcare, education, and government. LifeSize expects $90 million in revenue this year, and forecasts sales growth between 40% and 60% next year.

Logitech offers Webcams, headsets, and microphones for PC-to-PC video-calling. LifeSize would add to Logitech's portfolio infrastructure technology, such as gateways and multi-point control units, for bringing videoconferencing to the corporate boardroom and meeting room.

"We expect this acquisition to enable Logitech to extend our leadership in video communication beyond the desktop," Gerald P. Quindlen, Logitech president and chief executive, said in a statement.

In moving to the corporate market, Logitech faces stiff competition from industry giants, such as Siemens and Cisco. Last month, Cisco said it would acquire videoconferencing company Tandberg for $3 billion.

The Tandberg acquisition is a major building block in the networking company's strategy to expand from routers and switches into other areas, particularly video. The Tandberg technology is expected to complement Cisco's telepresence videoconferencing service and its online WebEx technology.

Videoconferencing in general is seen as a potential major growth area for networking companies. The technology's attraction to businesses lies in its ability to cut travel costs.


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