Cisco purchasing TANDBERG for $3 billion in cash
The march of technology companies buying each other marches on today with the announcement of Cisco Systems tendering a recommended offer to purchase Norwegian-based TANDBERG for $3 billion.
Technology companies seem to be in a buying spree despite the current economic recession that has seemingly hit every corner of the globe. First there was Dell buying Perot Systems, then Xerox purchasing Affiliated Computer Services and now Cisco has announced that is purchasing TANDBERG, a Norwegian company that specializes in video conferencing technology and equipment.
Cisco has offered 153.5 Norwegian Kroner (approx. $26.35 USD) per share for an aggregate purchase price of approximately $3 billion USD for the company. This offer represents an 11 percent premium to the previous day closing price of TANDBERG’s stock, and a 25.2 percent premium to the 3-month volume weighted average closing price for TANDBERG’s stock
While Cisco has had some history with playing communications, especially phone systems, they haven’t made heavy moves into video teleconferencing, or “TelePresence” as it seems to be known now, as of yet. While the company has made some movement into the field, and says it is one of its fastest growing divisions, the purchase of TANDBERG should catapult the Cisco presence in the space by leaps and bounds.
The deal is expected to be closed within the first half of 2010 barring any barriers that may crop up. Once the deal is completed, 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. As for the current 1,500 TENDBERG employees based in Norway and the UK, Cisco is saying that they will play a key role in the new division, so there is no current mention of cutting any of the current positions.
Currently Cisco is planning to try to increase TelePresence in corporations and then moving on to smaller businesses and then eventually on to home consumers. So don’t expect home TelePresence devices any time soon, but the day does appear to be coming where you can see Grandma in high quality video on those holiday calls.
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