Logitech pays $405 million to break into video conferencing

Logitech, the worldÔÇÖs biggest maker of mice as well as webcams and other computer accessories, has announced it is to buy video conferencing company LifeSize Communications for $405 million. Austin, Texas-based LifeSize provides high-definition video conferencing products to more than 9,000 customers in over 80 countries. Its clients include public healthcare, education and government organizations, as well as private businesses. The deal marks a significant move by Logitech, which is based in Freemont, California, and Romanel-Sur-Morges, Switzerland, to break into the growing video conferencing market. The firm will now be competing against Cisco Systems, Polycom, Microsoft, Hewlett-Packard and IBM, who have all made investments in the video conferencing industry.  Video conferencing has become increasingly accessible as internet connectivity improves, video becomes more efficient and prices of high-definition cameras and displays fall. ┬áÔÇ£We expect this acquisition to enable Logitech to extend our leadership in video communication beyond the desktop,ÔÇØ said Gerald Quindlen, Logitech president and CEO, commenting on the deal.  ÔÇ£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.ÔÇØ  ÔÇ£LifeSize was founded on the vision of providing life-like visual-communication solutions to change the way the world communicates,ÔÇØ added Craig Malloy, LifeSize co-founder and CEO.  ÔÇ£We believe that together with Logitech, we can realize that vision for all enterprisesÔÇöprivate and publicÔÇöand small and medium businesses.ÔÇØ  Logitech said it hopes to further video communication growth by leveraging the combined technology expertise of the two firms, as well as utilizing its own well-established manufacturing and supply chain operations, extensive R&D, expertise in user experience and significant brand presence.  The company plans to operate LifeSize as a separate division in Austin. LifeSizeÔÇÖs revenue is expected to hit around $90 million in 2009, with 2010 revenue expected to grow by between 40 percent and 60 percent. Logitech said the acquisition would slightly benefit its operating income starting in its fiscal year ending March 2011.  The acquisition is subject to regulatory approval but is expected to close in December this year.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *