Too early to talk HD Voice M&A?

With this weeks rush of acquisitions and investments in the IP communications space, one has to wonder who is looking at whom in terms of an acquisition or investment within the HD voice space. Two companies that immediately come to mind are AudioCodes and Polycom; Dialogic might be worth a look as well.

AudioCodes brought in $175 million last year and continues to generate positive revenues for the most part (2Q09 was two pennies per share loss). It also has over $116 million in the bank, giving the company the option to buy a smaller company or two if it so chose. A purchaser of AudioCodes would get a variety of technologies and products, including CPE end-points and IP phones, media gateways and servers, VoIP silicon for end-point points and servers, and media processing blades.  However, that same variety might deter a suitor that only was interested in one part of the business.

It’s hard not to think of Polycom in the M&A environment given all the buzz that Cisco has generated from attempting to buy TANDBERG — a move not liked by TANDBERG shareholders — and Logitech’s catch of LifeSize this week.   However, Polycom has over $400 million in cash and continues to post positive earnings growth, so anyone who wants to buy the company is going to end up paying a fat premium to get it.

A few analysts have suggested Polycom as the “next step” for HP, enabling the company to grow its videoconferencing business and also adding a line of IP phones and HD voice technology into the mix. If Cisco can’t lockdown Tandberg, it has enough loose change still rattling around in its pocket to make a play for Polycom.

Before the recession kicked in, Dialogic was the king of roll-ups, buying smaller companies at a rapid clip.  The company has accumulated a lot of voice and video processing technology that could be rolled into servers.   A purchaser would also buy a footprint into the telecommunications OEM market.

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