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Google makes $68.2 million cash offer for Global IP Solutions

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Google Acquisition Holdings, a Google subsidiary, is to make a public cash offer to acquire all shares of Global IP Solutions for $2.12 in cash per share, which represents an aggregate price of approximately $68.2 million based on the currently issued and outstanding share capital of GIPS.

Global IP Solutions, formerly known as Global IP Sound, was founded in July 1999 in Stockholm, Sweden and is currently headquartered in San Francisco. The company develops real-time voice and video processing software for IP networks and is known for developing the narrowband iLBC and wideband iSAC speech codecs.

Customers include Yahoo (GIPS powers the company’s Yahoo Messenger video calling functionality), AOL, Nortel, Oracle, Nimbuzz, Samsung, WebEx and other VoIP companies.

According to the letter GIPS penned for its current customers, Google was also part of that list, but will soon be the sole owner of the company.

The company also said that Google has reassured them that nothing will change for current and prospective customers of GIPS. Following the completion of the offer, Google self-reportedly intends to continue servicing GIPS’s customers in accordance with existing contracts while offering them the opportunity to transition to new offerings developed by the Mountain View search and Internet advertising giant.

The offer price represents a premium of 142.1% over the closing share price of GIPS stock on January 11, the last trading day prior to GIPS making a public announcement of strategic interest from a potential buyer and a premium of 27.5% compared to the closing share price on 14 May, 2010.

Google will be tapping its (vast) cash resources to fund the acquisition of the company, which is listed on the Oslo Stock Exchange – it intends to delist the company after the acquisition is complete.

There’s a lot more to this deal, but you can read the details (which are of interest primarily to GIPS shareholders) in the press release.

As to the why of the cash offer: Global IP Solutions offers high-definition (HD) and Super-wideband Voice as well as one way Video Conferencing/Chat capabilities for both iPhone and iPad developers, and recently expanded its service offering to Android developers as well.

Clearly, Google is betting big on a surge in video conversations over IP networks, particularly from mobile devices, in the coming years.

It has earlier purchased VoIP startup Gizmo5 for a rumored $30 million in cash, and video compression technology company On2 Technologies for $106 million.

  • http://www.geeky.it/?p=624 Google offre US$ 68.2 milioni per Global IP Solutions « Geeky
  • Jonathan

    They better crank up the acquisition machine, or they’ll get stuck in Microsoft-land, wherein you accumulate cash faster than regulators will ever let you spend it, and then you find yourself becoming a slow growth dinosaur doing $20 billion stock buy backs and paying dividends to retired old ladies.

  • hamza

    t has earlier purchased VoIP startup Gizmo5 for a rumored $30 million in cash, was great thing

  • http://www.ojointernet.com/noticias/google-hace-una-oferta-publica-por-global-ip-solutions/ Google hace una oferta pública por Global Ip Solutions

    […] Google Acquisition Holdings, subsidiaria de Google, ha hecho una oferta pública para adquirir todas las acciones de Global IP Solutions por 2,12 dólares por acción, es decir, por un precio total de 68,2 millones de dólares aproximadamente. […]

  • http://whileuslept.wordpress.com/2010/05/18/while-u-slept-bizbuz-the-5-big-overnight-business-stories-tuesday-051810/ While U Slept: Biz&Buz. The 5 Big Overnight Business Stories. Tuesday, 05/18/10 « whileUslept

    […] BONUS: GOOGLE OFFERS $68 MILLION FOR GLOBAL IP SOLUTIONS Scandinavian-born, SF-based company develops real-time voice and video processing software for IP networks. (TechCrunch) Possibly related posts: (automatically generated)While U Slept. The Big 5 Overnight Stories. Wednesday, April 28, 2010While U Slept: Biz&Buz. The Big 5 Overnight Business Stories. Thursday, 05/…While U Slept: Biz&Buz. The 5 Big Overnight Business Stories. Monday, 05/17/10 […]

  • http://www.goebel.net/technews/ Markus Goebel

    GIPS has also powers Nimbuzz and has deals with cell phone producers like LG, Samsung and Motorola. They are just great.

  • Frank-D

    cool, they soon will have aquired this much patents regarding this technology, that nobody (apple) will dare to sue any Android-Manufacturer anymore

  • drclue

    I’m certainly enjoying the show.

    The upcoming rounds are likely to be pretty bloody
    once certain global players start to tune in the picture.

  • http://www.pcartisan.com David1984

    $68.2 million is a lot of money and the fact that all this is offered cash further sweetens the deal

  • http://noticiastech.com/wordpress/?p=33244 » Google compra la empresa Global IP Solutions NoticiasTech

    […] acaba de comprar la empresa sueca Global IP Solutions por $68.2 millones, basada en San Francisco, California. La […]

  • http://ultimosavances.com/google-ofrece-682-millones-de-dolares-por-la-compania-global-ip-solutions/ Google ofrece 68,2 millones de dólares por la compañía Global IP Solutions | Ultimos Avances

    […] | TechCrunch Europe Más información | Nota de prensa […]

  • http://erictric.com/2010/05/18/google-to-acquire-global-ip-solutions/ Google To Acquire Global IP Solutions

    […] IP Solutions for $2.12 per share, or $68.2 million at today’s share capital, according to TechCrunch.Global IP Solutions specializes in VoIP, or voice over internet protocol, and is actually the […]

  • coolrepublica

    This is big news. Huge. It tells me google has plans to make real time video conversation that are high quality on the Android phone the future.

    • toddq

      Personally I don’t think I would like video conversations because I am not that great looking and it would require me to dress up a little before calling someone important. I do see how it could be a big innovation for the adult entertainment companies though.

  • Joe

    More notably GIPS also powered Skype early on.

  • http://www.mayadigital.com/2010/05/18/google-ofrece-682-millones-de-dolares-por-la-compania-global-ip-solutions/ Google ofrece 68,2 millones de dólares por la compañía Global IP Solutions | Maya Digital

    […] TechCrunch Europe y Genbeta Más información: Nota de prensa […]

  • toddq

    The Gizmo5 ($30 million), On2 ($106 million) and this $68 million deal add up to $204 million spent. This is a huge amount of money to me, but still less than 1% of Google’s $26 billion cash hoarde. I would not say they are bettting big relatively speaking.

  • http://xh3lo.wordpress.com/2010/05/18/google-ofrece-682-millones-de-dolares-por-la-compania-global-ip-solutions/ Google ofrece 68,2 millones de dólares por la compañía Global IP Solutions « El Blog de Xh3lo

    […] Vía  TechCrunch Europe […]

  • http://trends.site11.com/google-makes-68-2-million-cash-offer-for-global-ip-solutions/ Google makes $68.2 million cash offer for Global IP Solutions — News Tweets Gone Viral

    […] is to make a public cash offer to acquire all shares of Global IP Solutions for $2.12 … Link – Trackbacks Share and […]

  • http://www.topeka.com.uy/2010/05/19/google-ofrece-682-millones-de-dolares-por-la-compania-global-ip-solutions/ Google ofrece 68,2 millones de dólares por la compañía Global IP Solutions | topeka.uy

    […] Vía | TechCrunch Europe […]

  • http://gottabethin.com BeckyMinx

    That’s huge. Can’t wait to see the end products!

  • Duncan Baldwin

    I saw GIPS at a conference in Vegas a few months ago and they were showing off uses for the LSVX video codec. Is this why Google was interested in Global IP? Does anyone know if GIPS owns the LSVX patent?

  • http://www.spiritdsp.com/ Maxim

    All the industry is talking about Google aim to control all major VoIP technologies. Its intention to buy GIPS seems quite reasonable then. The other aspect is what it means for the current GIPS customers. Let’s not forget that some of them are direct competitors of Google. It’s not unlikely they will have to be satisfied with limited maintenance or no support at all. Google will for sure use VoIP as a platform in its Android OS, Google Chrome and very likely in its Google Apps. Google will require all GIPS’ expertise and engineering resource to support its VoIP strategies.
    On the other hand there is SPIRIT DSP which has been successfully competing with GIPS over all these years and now stays the only independent VoIP technology company on the market. SPIRIT is famous for its dislodging GIPS from Skype and was listed among the Top 10 VoIP leaders (http://www.fiercevoip.com/special-reports/top-10-voip-leaders) by FierceVoIP. Today SPIRIT offers its VVoIP platform on a variety of desktop and mobile platforms, supporting not only Google’s Android but iPhone, Symbian, Windows Mobile (http://www.spiritdsp.com/press/videoconferencing-on-mobile-platforms.php). SPIRIT is proud to offer a video server (http://spiritdsp.com/press/Video-server-1000-channels-release.php) with 1000-channel capacity. Now SPIRIT is the #1 choice for service providers, application developers, and telcos that are deploying voice and video communication services.

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