Google's VOIP buying spree continues with Global IP Solutions offer
By Tim Stevens 
posted May 18th 2010 10:17AM
posted May 18th 2010 10:17AM
Google to Make Cash Offer to Acquire Global IP Solutions
MOUNTAIN VIEW, Calif. and SAN FRANCISCO, May 18 /PRNewswire-FirstCall/ -- Google Inc. (Nasdaq: GOOG) and Global IP
Solutions (GIPS) Holding AB (publ) (OSE: GIPS) today announced that they have entered into a transaction agreement under which Google Acquisition Holdings Inc., a wholly owned subsidiary of Google, will make 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 approximately NOK 421 million (USD 68.2 million) based on the currently issued and outstanding share capital of GIPS.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081016/GIPSLOGO)
"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."
"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 recognized 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 offer price represents a premium of 142.1% over the closing share price of GIPS stock (adjusted for the rights issue in GIPS completed in March 2010) on January 11, 2010, the last trading day prior to GIPS making a public announcement of strategic interest from a potential buyer, a premium of 170.8% over the subscription price per share of GIPS stock in the last rights offering completed in March 2010 and a premium of 27.5% 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 54.6% compared to the adjusted volume weighted average market price for the last three month period prior to the announcement of the transaction.
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 90% 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, the offeror intends to cause GIPS 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.
An offer document setting forth in detail the terms of the offer is expected to be published and distributed to all GIPS shareholders on or about 20 May, 2010, following review and approval by the Oslo Stock Exchange. The expiration date of the offer is expected to be on or about 4 June, 2010, as it may be extended by the offeror in accordance with the offer document and applicable law. In the event the conditions to the offer are not satisfied or waived by the offeror prior to 31 August, 2010, the offer will lapse.
Based on the information provided on the date hereof, the board of directors of GIPS has made a resolution to recommend the offer. The statutory required statement from the board of directors of GIPS will be included in the offer document. Certain GIPS shareholders, including Kistefos Venture Capital AS and Kistefos Venture Capital II DA, have irrevocably committed to accept the offer with respect to approximately 50% of the outstanding shares and votes of GIPS.
GIPS has entered into a transaction agreement with Google which, among other things, regulates the offer process, imposes restrictions on certain actions by GIPS outside the ordinary course of business and contains non-solicitation provisions. The transaction agreement also provides that the board of directors of GIPS may only withdraw its recommendation on certain terms and conditions.
SEB Enskilda is acting as Google's sole strategic and financial advisor in the transaction and as the receiving agent for the offer. ABG Sundal Collier Norge ASA is acting as financial advisor to the GIPS board of directors.
The description contained herein is neither an offer to purchase nor a solicitation of an offer to sell shares of GIPS. On or about 19 May, 2010, the offeror plans to publish and distribute to all GIPS shareholders of record an offer document setting forth the terms of the offer. The offer document will contain important information about the offeror, GIPS, the transaction and related matters. Investors and GIPS shareholders are urged to read the offer document carefully when it becomes available. Investors will be able to obtain free copies of the offer document by contacting SEB Enskilda, the receiving agent for the offer, at +47 21008500 or by visiting www.sebenskilda.no.
The offer will not be made in any jurisdiction in which the making of the offer would not be in compliance with the laws of such jurisdiction.
About Global IP Solutions
Global IP Solutions (GIPS) provides best-in-class voice and video processing in IP communications. GIPS enables its customers to deliver unmatched quality, with a faster time to market and less risk than alternative solutions. GIPS serves application developers, service providers, and network equipment vendors. Its customer list includes Nortel, Oracle, Samsung, WebEx, Yahoo!, AOL and other key players in the VoIP market. The company is headquartered in San Francisco with offices in Stockholm, Boston and Hong Kong. More information at www.gipscorp.com.
About Google Inc.
Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, visit www.google.com.
Caution Concerning Forward-Looking Statements
This document includes certain forward-looking statements, including statements regarding the expected timing of the transaction, Google's and GIPS's ability to complete the transaction, and the expected benefits of the transaction. These statements are based on the current expectations or beliefs of managements of Google and GIPS and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to (1) changes in economic, business, competitive, technological and/or regulatory factors, (2) failure to receive required approvals for the transaction, (3) failure to compete successfully in a highly competitive and rapidly changing marketplace, (4) failure to retain key employees, and (5) other factors affecting the operation of the respective businesses of Google and GIPS. More detailed information about these and other factors that may affect current expectations may be found in filings by Google with the U.S. Securities and Exchange Commission, including Google's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and in filings by GIPS with the Oslo Stock Exchange, including GIPS's most recent annual and quarterly reports. Google and GIPS are under no obligation to, and expressly disclaim any such obligation to, update or alter their respective forward-looking statements, whether as a result of new information, future events, or otherwise.
Google Voice pwnage... god they are getting their hands into everything.
@chanceusc
Is the google monster still planning on blanketing a number of cities? Or have they lowered their ambitions to simply buying up dark fiber and setting up one hell of a fiber net? If they still want to blanket... this all could lead to some very interesting transitions in the telecom arena.
Technically, I suppose they dont need to do it themselves with the lower-band frequencies being auctioned off... hmm, very forward thinking.
@chanceusc
"they are getting their hands into everything"
no they arent... every large tech companies make acquisitions. its business as usual
Google's ultimate to goal is to become *the* best available source of info on everyone and everything.
Google might steal my girl friend since he is the G man....
@chanceusc
The other companies that rely on this tech which Google is buying = their nuts in Google's vice.
The future Skynet!
@account5
Um, Google is a bit of an exception, this is not just "business as usual."
It was originally JUST a search engine. Now, my personal / work email, work documents, cellphone OS, cellphone voicemail / sms service, home PC photo manager / viewer, online photo storage... all supplied and powered by Google. Much more than business as usual.
@chanceusc Google Voice to Europe please :o
@Schmich Well, at least Global IP Solutions is European (Norway).
@chanceusc In order to organize all the world's information, Google first needs to have access to all the world's information.
@chanceusc One should realize that google is a master when it comes on playing that game called 'monopoly' http://j.mp/google-will-kill-us
@chanceusc
Google Voice != VOIP.
They need to keep feeding the google voice monster. Awesome service, i hope they continue to expand it.
@Aridon ditto, need this overseas. I was approved for GV beta, then they saw my IP was overseas and shot me down :'(.
@juanvaldez Its not hard to get a voice account overseas but its pretty useless seeing as its not supported in any way.
Useful for sending international txts when the provider is compatible though.
@Aridon
Google Voice != VOIP. You still have to have a physical phone line (either a cellphone, landline, or VOIP like Skype).
Skynet's robots have to communicate. DUH!
A tie in for Google TV perhaps?
It's fairly obvious what Google are aiming for long-term. They experimented with changing the way mobiles are bought with the N1, and when that didn't work are now fully committed to eradicating networks altogether. A world blanketed with Google-brand wifi and free VOIP for all could be interesting...
@dboobis
Yeah, I called it when they bought Giz. That's why I bought a lousy prepaid instead of a nicer 2 year contract phone- I want to wait and see what the Big G is up to.
Nice, cant wait to see whats in store for the next year for Android! Nice!!!!
at this rate they should change from google to gobble
As Google adds more and more services and get bigger and bigger they start to worry me, not due to the same tired security reasons everyone else spouts, but because they are slowly positioning themselves as rivals to their own partners.
If you think updates to Android OS takes an age now, imagine when your carrier spends months stripping out the revenue losing portions from the code. Tethering? Get it out. Internet sharing vie Wifi?! OUT! VOIP and visual voice-mail that circumvents us?!? OUT OUT OUT!!!
Then there's the laying of their own fibre optic lines, the buying up of radio frequencies. Soon they'll be avoided by most carriers and we'll see more and more moves to block this sort of thing. The one thing Google doesn't have around the world is the lobbying power of the established cable, phone and internet providers. They don't have the ear of governments.
@Tes I think it'd be hard at this stage to boycott Android OS, AT&T and anyone else with iPhone can try but as soon as they don't have exclusivity see how far that takes them.
It's a desired OS, and as long as game theory exists there will be carriers who are willing to bend over just a bit more to gain market share. As they do gain market share then the same thing that other carriers are trying to prevent, costs incurred, will be offset by revenue losses. There may be better examples where it's easier to argue your point that I don't have knowledge of such as start-up ventures like this, not really sure, but they don't start out really aggressive in areas like this either. I think a telling example is how little need there is for Google TV and some OEMs tried to say they weren't having it, then a few never heard ofs came up to champion the cause and then some of the big boys started to sweat.
As far as having governments ears, they definitely have them, unfortunately they haven't been very good at changing their minds as in the cases of SK & China. I think they've been much more successful on their homecourt in the US though, in some cases we might not even realize.
@Tes
And people who actually want these will start buying devises from google like the Nexus One
@Tes
I agree with you, and Google's answer to that would simply be to create their OWN network.
In one way, it's cool to see a company shaking up the whole industry, but in another way, it is rather disturbing how many hands Google has in so many pots. And they have repeated shown that they have no problems with competing with their own partners.
@Tes Just buy it unlocked, no firmware changes whatsoever..
Google VOIP would own.
I don't care about ads, as long as they are relevant to what I am interested in, which is what google pwns at.
As a google voice and Gizmo5 user and a N1 owner I for one embrace our new overlords. Thanks to the GV app I can make "free" data only calls by freely using Voice via the GV app and then connecting to my N1 running Sipdroid with the free to receive sip calls Gizmo5 account. Have to use UDP thanks to ATT 3g but I just kill the app after making a call to conserve battery life. Voice texts me transcriptions of any incoming voice mail anyway. If Voice had free MMS texts I'd drop my voice plan all together.
Google voice in England please thank you.
@Apple Google Microsoft
hell, i'll just take Google Voice here in the states. can't for the life of me get an invite.
@willowtwf I'll give you one, but I don't really know how to contact you..
please Google, incorporate free voip into Google voice, over 3g as well. How rad would it be to just pay for a data plan for your smartphone ($30/month) and just use voip on gvoice without having to buy a voice plan from some provider.
My question is how will Google provide the bandwidth? All of this will not work if you have to use the carriers for service and their expensive voice plans. Is Google going to put up their own towers? Satellite phones?
@Mr Roarke
MY question is how are they going to provide acceptable customer service. Google CS is worse than COMCAST! I won't be relying on them for anything other than search or advertising until I know I can get someone on the phone who is going to be helpful.
Other than that, I'm game.
@tigerianwinter
I know the customer service with the N1 left something to be desired, but if Google decided to get good at something like CS, I'm pretty sure they could do it.
And another one bites the dust thanks to Google ... I like google as much as the next person and do use them every day however their payment system is shit and they did basically kill Gizmo5. Thanks to the Google purchase you cannot sign up for new accounts anymore and ofc Google just had to kill all payment methods that do not go though Google. No more Paypal basically means my bank gets to bend me over the table every time I pay in USD. Thanks google but now Skype actually ends up being cheaper ... sigh ... Seriously Google is the company that prides itself on being open and yet they are worst than Apple (which does actually accept PayPal) go figure ...
@grouver they're probably working on integrating gizmo5 into google voice FOR FREE, like they stopped people from signing up on grandcentral when they bought it.
This is a HUGE kick in the nutts to Apple, I can't imagine what would have happened, had Apple got their hands on GIPS. Just imagine Webex style videoconferencing on the EVO! The Qik app on the EVO is already compatible with Google-Talk, through contacts on the device.
Your soul is MINE!
I get the feeling google is on the verge of launching their own magic jack like solution.
google's probably trying to build their own network for Voip calling to compete with cell providers what with their 10Gbps trials and all
and they'll propably give it away for free with purchase of an android phone
I can see that in 5 years
@jqp
...and such an altruistic attribute for the G-men. Unfortunately, i suspect that is not the "ultimate" driving force behind anything they do. Preserving and improving revenue and earnings both in the US and overseas --- that's the ultimate goal for google. It's no different than most companies. It is NOT trying to be the best provider this or that. It's all about revenue and earnings. The why's are how's are complicated. For a better insight into that, review the last quarterly earinings report. 96% of their revenue was from advertisement on the desktop -- 66% for G owned sites and 30% from partners; They did not dissect the specifics of the other 3%, which would naturally consist of some mobile ad revenue. That's less than 3% revenue from cash and tertiary corporate acquisitions. Oh, don't forget all that Android- mobile driven revenue mixed into that 3%. Whereas, desktop search-driven ad revenue has matured, there's still plenty of opportunity for mobile advertising. As what was popularly reported recently, Android has overtaken Iphone OS and supposedly on it's way to world domination. But even so, it's contributes less than 3% of company earnings. Google is fast winning a race for which there is NO PRIZE. In contrast and dddly enough, whatever the hell Apple is doing, they must be playing by their own set of "rules" ( pardon the pun) as their mobile efforts appear to contribute to some serious cash flow.
Few people other than google itself knows the exact details of how it runs. If i were to guess, the company is probably spending much of it's time and money on maintaining and improving it's core machine -- desktop search-related ad revenue. Last quarter showed improved revenue but decreased margins -- a worrisome thought. Despite popular belief on engadget and other gadget blogs, Tablets, Android, voip-buying sprees, power grids, and heaven-knows-what are all "minor" activities on their global scale of things. They have to try everything. But remember everything has a price.
-- just my 2 cts
I will not be happy until Google buy's t-mobile. They could go to town rolling out LTE, sell their own phones cheap, and offer something like a $50 a month VOIP/data only plan. Everyone would switch in a heart beat.
Where in the H~LL is Gizmo5??
They bought them and did nothing!
Hell yeah, its time they introduce it to more countries,especially in the UK n in Europe.
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.