An Israeli business news report indicates that business communication solution developer, Avaya (News - Alert), will acquire video conferencing system maker, Radvision. According to the Israel-based business publication, Globes, the deal will be worth an estimated $200 to $250 million.

The Globes report, which cited no sources, noted that Radvision (News - Alert) shares shot up 11 percent yesterday on the Tel Aviv stock market. Trading of Radvision shares was briefly halted this morning by the exchange. With the rise in its shares, Radvision’s market cap has now reached $193.8 million, Globes said. The report also said that Radvision has been looking for an acquisition partner since the 2009 purchase of Tandberg (News - Alert), formerly the company’s largest customer, by Cisco Systems for $3.3 billion. As of Wednesday morning, when trading of its shares resume, Radvision moved up another 47 cents (4.7 percent) to $10.44.

The Globes reported that Zohar Zisapel and his brother Yehuda Zisapel own 27.6 percent and 6.3 percent of Radvision, respectively. The article said that the brothers had attempted to continue the business after the Tandberg sale, but had not managed to attract many new customers.

The company posted a fourth quarter 2011 loss of $4.5 million on revenues of $21.8 million. Revenues for the fourth quarter 2011 declined from 26.6 million in the same quarter 2010.  

StreetInsider.com noted that the reported deal would value Radvision shares between $10.85 and $13.57.

Avaya corporate communications spokesman, Joseph Barta, declined to comment on the reports, telling TMCnet that, “we do not comment on rumor/speculation.”

David Dines, principal analyst at ACG Research, told TMCnet that he had no specific knowledge of the rumored acquisition and hadn’t spoken to anyone at Radvision or Avaya. However, he indicated that the reported deal sounded like a reasonable move.

“At a first glance, it looks like it makes a lot of sense for both companies.  Avaya would benefit from a greater presence in the video conferencing/telepresence space,” Dines said. “Plus they would get additional engineering resources.  It is pretty clear that RADVision needs the deep pockets, and Avaya's brand and reach can only help with gaining market share.”

Check back with TMCnet for in-depth analysis and all the latest details as they become available.