— Deal Diary —
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By Olaf de Senerpont Domis
Published April 3, 2009 at 1:03 PM
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EXECUTIVE SUMMARY
- One analyst called Cisco-Pure Digital: “Cisco trying to dress up like Apple.”
- It's hard to match the iPhone, but people are using video to communicate, Cisco argues.
- There were no surprises, however, in Cisco's Fenwick & West adviser roster.
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When Cisco Systems Inc. on March 19 announced its intention to buy Pure Digital Technologies Inc.,
which makes a popular digital video camera, a lot of head scratching
ensued. Certainly, Cisco had struck consumer-oriented deals in the
past, starting with its $500 million purchase of home networking
equipment maker Linksys Group Inc. in 2003. But questions around
exactly how Cisco would integrate Pure Digital's small video camera and
associated software with its other products led Tal Liani, an analyst with Bank of America Merrill Lynch, to describe the deal as "Cisco trying to dress up like Apple."
It would be almost impossible to match the popularity of Apple's
ubiquitous iPhone, but consumers increasingly are using video to
communicate, Cisco argues. And video sucks up bandwidth on the very
networks powered by Cisco's switches and routers.
Continue reading below
With Cisco's track record in M&A, observers might be surprised
by how the company weaves Pure Digital's Flip Video camcorder into its
"digital home" offerings. There were no surprises, however, in the
adviser roster for the $590 million deal. Cisco relied on its internal
M&A team, led by vice president of corporate business development Charles Carmel. It also turned to its go-to legal team from Fenwick & West LLP, led by Doug Cogen and a team of corporate attorneys including Andrew Luh, Mariana Antcheva, Aviva Aminova, Cara Kitagawa, Tommie Wilson and Rita Tan. Also working on the deal were executive comp and employee benefits attorneys Scott Spector, Liza Morgan and Gerald Audant; technology transactions attorneys Larry Granatelli, Lisa Kenkel, Mark Ostrau, Morgan Fong, Jennifer Stanley, Lance Stern, Greg Sato, Michael Egger, Spencer Glende, Diana Lock, Robert Dowers, Aaron Weiss and Michael Davis-Wilson; trademark attorney Meredith Pavia; and tax attorneys Ron Schrotenboer and Tim Fitzgibbon.
Pure Digital hired no banker and retained Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP for legal advice. The team consisted of corporate securities and M&A partners Robert Gunderson Jr., Anthony McCusker and Gari Cheever and executive compensation and benefits partners Sharon Hendricks and Dan Niehans. Partner Steve Franklin handled tax issues, and Jim Riley Jr. worked on intellectual property.
Founding partner Gunderson says the deal went from receipt of the
first draft of the agreement to signing within two weeks. The brevity
of negotiations might have stemmed from the fact that news of the deal
leaked to the media in the weeks before its announcement.
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