FREMONT, Calif. ( TheStreet -- Logitech ( LOGI) has thrown down $405 million to acquire LifeSize Communications, boosting its presence in the booming video-conferencing market. That market has already attracted the likes of Cisco ( CSCO), Hewlett-Packard ( HPQ ) and Apple ( AAPL). The all-cash deal, which was announced late Tuesday, aims to extend Logitech's reach beyond Web cams into enterprise video conferencing. Austin, Texas-based, privately held LifeSize builds high-definition video-conferencing technology and has more than 9,000 customers around the world. "We expect this acquisition to enable Logitech to extend our leadership in video communication beyond the desktop," Logitech CEO Gerald Quindlen said in a statement. "Together we can make life-like, HD-quality video communication as mainstream and seamless as a telephone." Investors responded positively to the deal. Logitech shares rose 41 cents, or 2.27%, to $18.48 Tuesday, outpacing the broader advance in tech stocks the saw the Nasdaq rise 1.2%. Logitech plans to run LifeSize as a separate division in Texas, run by its current CEO Craig Malloy. LifeSize expects to bring in revenue of around $90 million during calendar year 2009, a figure that is expected to grow between 40% and 60% next year. Excluding acquisition-related charges, the deal will be neutral to slightly positive to Logitech's operating income in fiscal 2011, according to the Silicon Valley-based firm. The acquisition will be positive thereafter, it added. Logitech, which enjoyed better-than-expected sales during its recent second quarter, is just one of a number of firms ramping up video-conferencing efforts.
Networking giant Cisco launched a $3 billion bid to buy Norwegian firm Tandberg earlier this year, but has recently come under pressure to increase its offer. Rival H-P has also been making a song and dance about its own 'Halo' telepresence and video-conferencing products. Other tech bellwethers that have increased their video-conferencing efforts include Apple, Microsoft ( MSFT ) and Huawei. Tandberg rival Polycom ( PLCM) has itself been touted as a potential acquisition target, with Avaya mentioned as a possible suitor. LogiTech expects to complete the LifeSize acquisition in December. -- Reported by James Rogers in New York