Cisco sweeps up Tandberg for $3b

Natalie Apostolou
02/10/2009
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Daily News

Cisco is expanding its collaboration business with the acquisition of videoconferencing firm Tandberg for $3 billion.

Cisco’s cash offer, of NKr153.5 for each Tandberg share, represents an 11% premium to the Wednesday closing price of the Oslo-listed firm. The Tandberg board said it had accepted the offer.

Under the acquisition Cisco said it would retain Tandberg's Norway operations as a European center of video excellence, complementing its own video team in Belgium.

Tandberg's global workforce of 1,500 employees will also be kept. Tandberg's CEO Fredrik Halvorsen will head the new Telepresence Technology Group. He will report to Marthin De Beer, senior VP of Cisco's Emerging Technologies Group.

The acquisition is Cisco’s largest since its $3.2 billion cash purchase of collaboration software provider Webex in 2007.

Tandberg’s solutions fill in the gap between Cisco’s Webex desktop online collaboration products and its high-end Telepresence conferencing solutions, which retail at around $250,000 each.

The deal is also one more sign of Cisco expanding from its core business of making heavy-duty networking gear for enterprises and carriers. As well as conferencing, it offers unified communications, data center, smart grid and consumer networking products.

Subject to regulatory approval, the takeover is expected to close in the first half of 2010, and Cisco expects the acquisition to add to its non-GAAP earnings in fiscal 2011.

In 2007, Ericsson acquired Tandberg Television to expand its IPTV product set.

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