Microsoft Might Buy Logitech... And It Should (MSFT, LOGI, MCZ)

Shares of Logitech (NASDAQ: LOGI) are trading up over 8% in early Thursday trading.  The maker of keyboards, mouses, PC-cams, microphones, and all other computer peripherals is trading up on market chatter and speculation that Microsoft may want to acquire the company.

While this is a mostly hardware company, this might actually be a good fit for Microsoft. The company is expected to have revenues of $2.39 Billion for its annual March-2008 numbers.  It also trades at 23.4-times fiscal March-2008 earnings if the estimates are accurate, and its currency converted market cap is roughly $6 Billion.  Logitech also just unveiled its new line of peripherals at CES this week.

Many analysts have panned software companies making hardware acquisition efforts.  This one makes sense though when you consider that Microsoft already makes many of its own computer peripherals. If nothing else, it might be a great bit of subliminal marketing with the company name being all over your desktop without you even realizing it.

Shares of Logitech are trading up over 8% at $33.86 and its 52-week trading range is $25.05 to $37.03.

If Logitech doesn’t get acquired by Microsoft, Logitech should consider acquiring Mad Catz Interactive (AMEX: MCZ).  That would lock-up a competitor in the video game peripherals space that has been making some inroads despite its sub-$100 million market capitalization.  With the $500 million or so bump in Logitech’s market cap today, the company could get Mad Catz for free.

Jon C. Ogg
January 10, 2008