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.