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March 15, 2012

Avaya Confirms $230 Million RADVISION Acquisition

By Chris Freeburn, TMCnet Web Editor

Yesterday’s rumor that Ayava’s planned to acquire Israeli videoconferencing developer RADVISION was proven correct when the two firms announced the purchase this morning.

In a statement released by RADVISION, the company said it had made a “definitive merger agreement with Avaya (News - Alert).” Under the terms of the agreement, Avaya will acquire all outstanding shares of RADVISION for $11.85 per share in a cash transaction, making RADVISION a wholly-owned subsidiary of Avaya. At that share price, the acquisition will cost Avaya roughly $230 million. The purchase price is about 57 percent above RADVISION’s average daily share price over the past three months. Avaya issued a news release and tweeted its own announcements of the deal this morning.

While the acquisition has received approval from both companies’ boards of directors, RADVISION shareholders must still give final approval to the transaction. The company will call a shareholder vote on the agreement shortly, the release noted. Both companies indicated that they anticipated completing the merger within 90 days.

In a conference call this morning, Gary Barnett (News - Alert), senior vice-president of collaboration infrastructure at Avaya, called the acquisition “an important expansion of Avaya’s product line and strategy.” He noted that Avaya had been seeking a partner with videoconferencing technology to boost its line of office and IP unified communications solutions.

“We believe a number of industry trends including mobile and virtual workforces and the proliferation of mobile devices in the workplace are driving rising demand for videoconferencing,” he said. Bennett stated that RADVISION’s product line will be integrated into Avaya’s unified communication product line. “By acquiring RADVISION, we see a compelling opportunity to strengthen our market position in unified communication. It’s an exciting prospect that will benefit our channel partners and customers,” Bennett explained.

The existing interoperability of Avaya and RADVISION technologies played a major role in persuading Avaya to acquire RADVISION, Bennett said. However, Bennett noted that an increasing focus on cloud-based technologies also made a major contribution to the decision. “RADVISION’s technology is cloud-ready. That was a very important component in making RADVISION the right transaction for us,” he explained.

“Together we expect to deliver the industry’s most comprehensive UC portfolio of videoconferencing products,” said Boaz Raviv, RADVISION chief executive officer, during the conference call. “RADVISION’s clients will benefit from Avaya’s global market reach.”

Avaya will integrate RADVISION’s solutions and technology into its unified communications for offices product lines, said Nick Francis, vice president, Global Sales & Marketing - Video Collaboration at Avaya. “This acquisition is ideal for both companies. Avaya’s customers are looking for a total videoconferencing solution and they want it delivered by a leader in unified communications. With this merger we will be the first provider to deliver videoconferencing in the office and on mobile devices anywhere, anytime,” Francis commented during the conference call. He noted that the combination of the two companies’ solutions will add many new capabilities to Avaya’s UC offerings.

“This will make videoconferencing as easy as a phone call. We will help our customers move from scheduled videoconferencing to ad hoc videoconferencing available to everyone anytime, regardless of their location.”

Edited by Tammy Wolf
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