Cisco Bets $3B on Tandberg
Cisco says it is paying an 11 percent premium for Tandberg's outstanding shares, based on yesterday's closing price. If regulators allow the deal, which is set to close in 2010, Cisco says the acquisition will be accretive to non-GAAP earnings for its 2011 fiscal year. Tandberg said its board has already blessed the terms of the deal. (See Cisco Offers $3B for Tandberg.)
Tandberg CEO Fredrik Halvorsen will head up a newly created TelePresence Technology Group, and report to Marthin De Beer, the SVP of Cisco's Emerging Technologies Group, when the deal is done.
Tandberg has 1,500 employees (with "innovation centers" in Norway and the U.K.), but Cisco did not indicate in the announcement how many will be expected to stay with Cisco once the companies are combined. Cisco chairman and CEO John Chambers did stress that Cisco's and Tandberg's connections run deeper than products and technologies.
"Cisco and Tandberg have remarkably similar cultures and a shared vision to change the way the world works through collaboration and video communications technologies," Chambers said, in a statement. "Collaboration is a $34 billion market and is growing rapidly -- enabled by networked Web 2.0 technologies."
The Tandberg bid marks Cisco's latest large video-related acquisition, but it's the first involving a publicly held company based outside the U.S. Cisco first got into the cable and telco video game in a big way in 2005 when it put up $6.9 billion to purchase Scientific-Atlanta Inc. (See Cisco to Acquire Scientific-Atlanta.)
— Jeff Baumgartner, Site Editor, Cable Digital News
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To clear up any possible confusion, this deal has nothing to do with Tandberg Television, the company known for its video encoding gear and video-on-demand and interactive television backoffice software. Ericsson bought Tandberg for $1.4 billion in 2007, trumping Arris's original bid.