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Avistar Inks Technology Licensing Deal with IBM

September 28, 2008 – Comments (0) | RELATED TICKERS: AVSR , IBM

Avistar Inks Technology Licensing Deal with IBM
Avistar Communications (AVSR) recently signed a technology and product licensing agreement with IBM, which is detailed in a SEC filing today [PDF link]. Terms of the five-year deal call for Avistar to incorporate its bandwidth management technology into future Lotus Unified Communications product offerings. Avistar will receive an upfront cash payment of $3 million within 60 days followed by two additional $1.5 million payments, which are non-refundable and based on scheduled deliveries by the Company to IBM. Avistar will also receive a 2% royalty rate on global net sales and maintenance revenue from existing customers of Lotus Unified Communications products which incorporate the Company's technology after an undisclosed, initial sales threshold is reached by IBM.

Shares of Avistar are currently trading down by 1.6% today at $1.20 per share while IBM is up about 4% at $119 per share. However, over the past six months, shares of Avistar have gained over 20% while IBM and the Nasdaq Composite Index have remained nearly unchanged. Both companies intend to issue a formal press release about the deal within the next five business days. Avistar [website link] specializes in video communications technology which enables individuals and organizations to collaborate more effectively regardless of their location. Insiders also appear bullish on the prospects for Avistar, with over 167,000 shares purchased in the past six months at prices ranging from $0.82 - $1.13 per share.