ViVu bolsters Polycom’s Web-based videoconferencing credentials

Contact: Thejeswi Venkatesh

After sitting out of the market for four years, Polycom’s M&A wheels are turning once again. The acquisition of ViVu on Monday was the company’s third purchase this year, and helps Polycom round out its videoconferencing offerings. With many observers expecting video collaboration to become ubiquitous, the purchase helps Polycom extend its offerings into the Web videoconferencing arena – in-line with its declared strategy.

Terms of the deal were not disclosed, but we understand that ViVu was generating less than $2m in revenue. Cupertino, California-based ViVu, which came to market in 2010, had raised just $3.2m in venture funding and was looking to score a second round at the time of its acquisition. (Other companies in the space, including Vidyo and Blue Jeans Networks, have been successful at landing substantial amounts of funding.) Given these dynamics, we suspect that ViVu received a healthy multiple and we wouldn’t be surprised if other suitors, including TIBCO Software, were involved in the bidding process.

The transaction comes at a time of dramatic changes in the videoconferencing market. Microsoft closed its pickup of Skype – the largest-ever purchase for the tech giant – just last Friday. ViVu provides a plug-in for Skype and Polycom has worked with Microsoft on its Lync offering for a number of years. Polycom believes that the two deals will expand its market opportunities.

Select Polycom acquisitions

Date announced Target Deal value Focus
October 17, 2011 ViVu Not disclosed Web-based videoconferencing capabilities
June 1, 2011 HP (visual collaboration business) $89m Videoconferencing
March 23, 2011 Accordent Technologies $50m Non-real-time capabilities
February 7, 2007 SpectraLink $220m Wireless IP telephony

Source: The 451 M&A KnowledgeBase