In an effort that suggests Google could be a major player in the transit of audio and video over IP into the future, the search giant has made an all-cash offer to buy Norwegian firm Global IP Solutions (GIPS) for US$68.2m.
Google’s wholly owned subsidiary Google Acquisition Holdings has made a recommended voluntary public cash offer to acquire all the issued and to be issued shares of GIPS for NOK 13.0 (USD 2.12) in cash per share, or an aggregate price of about US$68.2m based on the currently issued and outstanding share capital of GIPS.
About Global IP Solutions
Global IP Solutions is the recognised leader in world-class voice and video processing technology for IP networks. GIPS software is deployed in more than 800 million end-points and delivers cutting-edge functionality that can be easily integrated. GIPS enables service providers, applications developers and hardware manufacturers to differentiate their products to reduce churn and increase customer satisfaction.
“The web is evolving quickly as a development platform, and real-time video and audio communication over the internet are becoming important new tools for users,” said Rian Liebenberg, engineering director at Google.
“GIPS’s technology provides high quality, real-time audio and video over an IP network, and we’re looking forward to working with the GIPS team at Google to continue innovating for the web platform.”
The offer price represents a premium of 142.1pc over the closing share price of GIPS stock (adjusted for the rights issue in GIPS completed in March 2010) on 11 January 2010, the last trading day prior to GIPS making a public announcement of strategic interest from a potential buyer, a premium of 170.8pc over the subscription price per share of GIPS stock in the last rights offering completed in March 2010 and a premium of 27.5pc compared to the closing share price on 14 May 2010, the last trading day prior to the offeror’s public announcement of its intention to make the offer.
Furthermore, the offer price represents a premium of 54.6pc compared to the adjusted volume weighted average market price for the last three-month period prior to the announcement of the transaction.
GIP’s reaction to Google acquisition
“This is an exciting milestone for GIPS as we join Google with a shared vision to transform and accelerate IP communications,” said Emerick Woods, Global IP Solutions CEO. “With Google’s global reach, scale and widely recognised leadership, we are confident that our existing customers will continue to be fully supported while we continue to enhance and extend our products and technology at Google.”
The completion of the offer will be subject to the satisfaction or waiver by the offeror of customary conditions, including acceptance of the offer by the holders of at least 90pc of the GIPS share capital on a fully diluted basis.
The transaction is not currently expected to require approval by competition authorities in any jurisdiction. The offer will not be subject to any financing condition and will be funded from Google’s existing cash resources.
Following the successful completion of the offer, Google intends to submit an application to delist the GIPS stock from the Oslo Stock Exchange and to initiate compulsory acquisition proceedings with respect to the remaining minority shareholdings in GIPS in accordance with Swedish law.
GIPS shareholders, including Kistefos Venture Capital AS and Kistefos Venture Capital II DA, have irrevocably committed to accept the offer with respect to about 50pc of the outstanding shares and votes of GIPS.
By John Kennedy
Photo: Global IP Solutions, which is being acquired by Google, is a recognised leader in voice and video processing technology for IP networks