Logitech Acquires Norwegian Company – Analyst Blog

Logitech International (LOGI) has acquired a Norway-based company, Paradial AS. The target company specializes in providing firewall and network-based solutions for video communication.

This accqusition will help Logitech to own the technology that can give access to any protected network and is most extensively utilized in internet-based video communication. Logitech will integrate this technology into its video communication product portfolio.

Financial terms and conditions were not disclosed. Most of the target company’s employees will join Logitech’s LifeSize segment.

Logitech is quite successful and competitive in product markets due to its understanding of product definition, technology and industrial design excellence, which is demonstrated by the various awards that its product designs continue to receive. In addition, the expertise in key engineering disciplines that support its products and continued enhancement of its products have built a portfolio of approximately 400 patents.

Volume manufacturing and distribution capabilities allow the company to maintain strong quality process controls and realize significant cost efficiencies. The capability of drawing upon the strengths of its global resources, global distribution system and presence in diverse geographies act as significant barriers to entry.

Its business depends in part on access to third-party platforms or technologies. If the access is withdrawn, denied, or is not available on acceptable terms, or if the platforms or technologies change suddenly, its business and operating results could be adversely impacted.

Principal manufacturing operations and third-party contract manufacturers are located in China, which exposes the company to risks associated with doing business in that country. It also conducts operations in a number of countries, and the effect of business, legal and political risks associated with international operations could significantly harm the company.

Logitech International S.A. is a global leader in peripherals for personal computers and other digital platforms, developing and marketing innovative products in PC navigation, Internet communications, digital music, home-entertainment control, video security, interactive gaming and wireless devices.

We currently have an Underperform recommendation on LOGI.