Logitech buys LifeSize for $405m

A few weeks ago I met with Craig Malloy, co-founder and CEO of high-definition videoconferencing specialist LifeSize Communications, as the company was introducing its Skype-compatible Passport product. Naturally the conversation touched on Cisco's recent purchase of Tandberg. I asked Craig, somewhat flippantly, 'What if someone came waving $3 billion at you?', to which he replied, 'I guess we'd be acquired'. As it turns out, $405 million did the job, as this is the sum that Logitech is paying, in cash, for the company.

LifeSize and Logitech clearly fit well together: Logitech is a $2.2 billion peripherals company with 8,000 employees and a sales footprint in over 100 countries; LifeSize is a $90 million HD videoconferencing specialist with about 300 employees and a customer base that takes in enterprises, SMEs, healthcare, education and government. We've reviewed LifeSize kit and been impressed with its value for money compared to traditional 'telepresence' offerings. With Logitech's muscle behind it, LifeSize — which will retain its name and operate as a separate division under Malloy — looks well placed to improve its position in the business videoconferencing market.

Following Cisco/Tandberg and now Logitech/LifeSize, some observers are asking whether the remaining independent videoconferencing specialist, Polycom, will be the next to be snapped up. With 2008 revenues of $1.1 billion, it'll be a lot more expensive than LifeSize, that's for sure.

In a statement, Steve Leyland, Polycom's general manager EMEA, said: "Today’s news is further evidence that visual communications is on the cusp of going mainstream. Polycom is the market-share leader in the industry with the most comprehensive solution for video-enabling businesses of all sizes, and remains focused on delivering the best open, standards-based solutions to our customers. Polycom is well positioned to lead this market from a technology, financial and execution standpoint. We see this as creating additional opportunities for Polycom and our partners as the only independent video solution provider of scale".