Logitech Acquires LifeSize Communications

PC video communication company Logitech International announced it has agreed to acquire privately held LifeSize Communications, a high-definition video communication solutions specialist, for $405 million in cash.

LifeSize currently boasts more than 9,000 video conferencing customers across 80 countries in large enterprises, small to medium-size businesses (SMBs), and public health care, education and government organizations.

LifeSize, founded in 2003 and located in Austin, Texas, employs around 330 employees worldwide and expects to earn $90 million in revenue in 2009. The company offers a variety of solutions aimed at midmarket companies, including LifeSize Passport, a palm-sized HD video system, and LifeSize Express 220, an HD video communications system.

The acquisition is subject to customary closing conditions, including antitrust approval, and is expected to close in December. Logitech said it plans for LifeSize to operate as a separate division in Austin under the leadership of Craig Malloy as the LifeSize Communications CEO, reporting to Logitech President and CEO Gerald Quindlen.

In a letter to LifeSize customers and partners, Malloy and Quindlen said the two companies share a vision for the role of video in business and professional communication, believing that anywhere there is voice there should be video. “We believe Logitech and LifeSize—in partnership with other leading technology companies—can drive innovation, price/performance and open standards so that the experience of visual communication is just as common and natural,” the letter reads.

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

Logitech and LifeSize said they also expect to further video communication growth by leveraging their combined technology expertise as well as Logitech’s manufacturing and supply chain operations and research and development (R&D) operations. Logitech said it expects the acquisition to be neutral to slightly positive to its operating income (excluding acquisition-related charges) in the 2011 fiscal year ending March 31, 2011, and positive thereafter.

“LifeSize was founded on the vision of providing life-like visual-communication solutions to change the way the world communicates,” Malloy said in a prepared statement. “We believe that together with Logitech, we can realize that vision for all enterprises—private and public—and small and medium businesses. Our combined proven innovation can accelerate mainstream adoption of video communication by anyone, anywhere.”