Logitech buys LifeSize Comms for $405 million

By Katie Reid

ZURICH (Reuters) - Logitech said it is buying privately held LifeSize Communications for $405 million, bolstering its position in the much-prized video communication market, which is seen as a key source of future growth.

LifeSize Communications has more than 9,000 video conferencing customers, Logitech -- the world's largest computer mouse maker -- said late on Tuesday.

"We expect this acquisition to extend our leadership in video communication beyond the desktop," Logitech Chief Executive Gerald Quindlen said.

The deal should be neutral to slightly positive to operating income in its 2011 fiscal year and positive thereafter, said Logitech, which also makes speakers, webcams and keyboards.

LifeSize sees revenue of around $90 million for 2009, which is expected to grow between 40 and 60 percent in 2010.

Shares in Logitech rose 2.04 percent by 0943 GMT, against a 0.5 percent higher Swiss midcap index and a 0.5 percent rise in Norwegian video conferencing equipment company Tandberg.

Analysts at Swiss bank Wegelin said the acquisition made sense, even though Logitech was paying a "considerable" price. "Logitech has long-since proved itself to be the one that stands out from the crowd," they said.