It's True: Avaya Buying Radvision, For $230 Million

Confirming several months of rumors, Avaya on Thursday confirmed it will acquire videoconferencing specialist Radvision, dramatically expanding Avaya's videoconferencing footprint and its ability to provide video experiences for a range of scenarios, including mobile devices.

Under the terms of the deal, Radvision shareholders receive about $11.85 per share, which puts the value of the transaction at about $230 million. Avaya said it expects the deal to close within 90 days.

Avaya plans to integrate Radvision's video infrastructure and endpoints with Aura, Avaya's virtualized unified communications platform. Radvision brings to Avaya a wide range of video assets, including its Scopia video product line, and its recently released high-end videoconferencing system, the XT5000.

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The move make sense for both vendors. Avaya, which according to Infonetics Research narrowly leads Cisco in terms of worldwide PBX revenue market share, had sought a deeper presence in video, where it mostly relies on partnerships with vendors like LifeSize Communications and its Avaya Desktop Video Device. Infonetics pegs the enterprise spend on videoconferencing and telepresence hardware and software to be a cumulative $22 billion from 2012 to 2016, and Cisco and Polycom dominate the market.

Avaya, which is headed for an IPO assumed to be sometime this year, has made a streak of small acquisitions in areas adjacent to its UC dominance. Radvision represents its largest acquisition since Avaya ponied up about $915 million for Nortel's former enterprise business unit in 2009.

Radvision, which in 2010 lost a lucrative OEM deal with Cisco that at one point constituted more than one third of its overall revenue, has spent the past two years building up its videoconferencing and mobile video wares. It also has a suite of voice and video developer tools, BEEHD, that would fit with Avaya's stepped-up emphasis on app development and what it can offer third-party developer partners.

"The opportunity for personal workspace is now," Kevin Kennedy, Avaya's president and CEO, said in a statement. "Customers demand a rich, collaborative user experience that is interoperable and easy to use. In addition we believe this transaction will leverage a highly-skilled, incredibly talented and experienced workforce ready to deliver video to enterprise customers."

Avaya did not provide details as to how Radvision's existing employes and management team would be integrated into the company.

"Radvision has a strong heritage of developing and delivering innovative videoconferencing products and technologies deployed by Fortune 500 companies and global service providers," Boaz Raviv, Radvision's CEO, said in a statement. "Avaya's commitment to quality, innovation, open architectures and industry standards is an ideal fit to advance Radvision's vision for making video part of everyday life."

In a statement, Ira Weinstein, senior analyst and partner at Wainhouse Research, called the deal a "win for both of these companies, their channel partners, and their end-user customers."

"The addition of the Radvision video portfolio to Avaya's business collaboration solutions is a powerful combination," Weinstein said. "Radvision's video management capabilities, video bridging solutions, and video endpoint portfolio complement the Avaya Aura unified communications platform."