Video conferencing solutions developer Radvision Ltd. (Nasdaq: RVSN; TASE: RVSN) has been acquired by Avaya plc (NYSE: AV) for $230 million. The company announced this morning that it has signed the merger agreement, confirming yesterday's media reports, under which Avaya will pay $11.85 per share and become a wholly-owned subsidiary of Avaya.
The share price reflects a 57% premium over Radvision's average closing share price for the past 90 trading days. The TASE suspended trading in Radvision's share until 3:30 pm today, after the share price rose 19.1% yesterday to NIS 38.50, and rose 12.3% on Nasdaq yesterday to $11.20, giving a market cap of $217 million.
Radvision said, "The integrated Avaya and Radvision portfolios will extend intra-company business-to-business (B2B) and business-to-customer (B2C) video communications that support the bring-your-own-device (BYOD)."
Radvision has been slipping ever since Cisco Systems Inc. (Nasdaq: CSCO), Radvision's main customer, acquired its rival, Norwegian competitor Tandberg in October 2009. In 2011, Radvision's revenue fell 18%, compared with 2010, to $78 million, and its net loss rose almost seven-fold to $23.4 million. The company's cash reserves shrank by $25.8 million during the year.
The company's guidance for the first quarter of 2012 was bleak. It forecast $17 million revenue, 18% less than for the corresponding quarter of 2011, and a doubling of its net loss to $7.6 million.
Zohar Zisapel owns 26.3% of Radvision, and his brother, Yehuda, owns 6.3%. The company has 400 employees, half of them in Israel.
Radvision CEO Boaz Raviv said, "Joining forces with Avaya will deepen our resources, extend the scope of our channel relationships and make us a formidable competitor in the unified communications marketplace."
Avaya president and CEO Kevin Kennedy said, "The opportunity for personal workspace is now, and customers demand a rich, collaborative user experience that is interoperable and easy to use." He added, "With this acquisition we will seek to extend videoconferencing to any device, anytime, anywhere, making it as easy as a phone call, seizing the opportunity to deliver a fully-integrated solution and architecture that we believe sets us apart from the competition."
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2012
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