Buyout follows Cisco?s $3 billion gamble in the growing video-chat sector

Logitech buys video-telecoms firm for $405m

Logitech is banking on the future of the video-telecoms industry after fronting $405 million in cash to acquire Texas based LifeSize Communications.

LifeSize, a leading group in the (HD) video communication industry, claims to have more than 9,000 video conferencing customers across 80 countries. As part of the buyout deal, the firm will still operate as a separate Logitech division in its Austin headquarters.

The extravagant buyout comes in the wake of Cisco’s shock $3 billion acquisition of Norwegian videoconferencing group Tandberg, which the firm announced back in October.

If the deal goes ahead, Logitech will position LifeSize to build on its strong client list, adding new partnerships and driving forward what it deems “an open eco-system for interoperable video communication.”

Logitech was upbeat about the $405 million dent the buyout will make. It claims that LifeSize is set to make about $90 million in revenue for the 2009 calendar year, with revenues expected to rocket 40-60 per cent in the following year.

The firm thinks that the deal will break even during FY 2011, and will grow thereafter.

“We expect this acquisition to enable Logitech to extend our leadership in video communication beyond the desktop,” said Logitech CEO Gerald Quindlen.

The deal is subject to antitrust approval.

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