Late last week Cisco agreed to acquire webinar firm WebEx for $3.2 billion in cash (press release). WebEx in 2006 generated nearly $50 million in profit on about $380 million in revenue. They have $300 million or so in cash on hand, so the net deal value is $2.9 billion. Under the terms of the agreement, Cisco will commence a cash tender offer to purchase all of the outstanding shares of WebEx for $57 per share. Ouch, that is a pretty steep price per share I would think.

There is some more detailed analysis and commentary here:

• Q&A: Inside Cisco’s $3.2 Billion WebEx Bet (Network World)
• WebEx: What Cisco Gets From Acquisition (Linux World)
• Why Cisco Bought WebEx (O’Reilly Radar)

WebEx may be the leader from market share point-of-view, but it