Avaya close to acquiring Radvision

By Chad Berndtson on Mar 15, 2012 8:21 AM
Filed under Strategy

Wants bigger presence in business video.

Avaya plans to pull the trigger on an acquisition of videoconferencing vendor Radvision as soon as this week, according to a published report in the Israeli newspaper Globes.

The price sits between $US200 million ($A191 million) and $250 million, the newspaper reported. Trading on Radvision's stock was halted Wednesday on the Tel Aviv Stock Exchange for a brief period.

It's the second time that Globes, which frequently publishes anonymously sourced reports on M&A activity involving Israeli tech companies, has mentioned a potential Avaya buyout of Radvision. It first reported in December that Avaya and Radvision were in late-stage talks.

Representatives from Avaya and Radvision declined comment to CRN.

Avaya has acquired several companies in the past two years with technologies that round out its unified communications and contact centre portfolios, and the company has sought a bigger presence in business video, where its chief UC rival, Cisco, dominates.

Radvision has been on the defensive since losing an OEM relationship with Cisco in 2010, following Cisco's acquisition of videoconferencing heavyweight Tandberg. At one point, the OEM agreement with Cisco constituted more than one-third of Radvision's revenue, and Radvision has spent the past two years expanding its videoconferencing and mobile video wares to make up ground.

The move would make sense for both companies, industry analysts said Wednesday.

Zeus Kerravala, founder and principal analyst with ZK Research, said in a post Radvision is in need of a stronger marketing strategy and Avaya, which is headed for an IPO, needs a bolstered video story to make it attractive to investors.

"Video is hot and, unlike in the past, this momentum appears to be sustainable," Kerravala said. "Right now Avaya's video strategy is the Desktop Video Device and partnerships, but that doesn't really allow Avaya to directly benefit from the growth of the video market."

Avaya, with its growing emphasis on app development and software programs for third-party developers, also would benefit from Radvision's BEEHD voice and video developer tools, Kerravala noted.

This article originally appeared at crn.com

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