An agreement between Technicolour and Cisco for the acquisition of its customer premises equipment (CPE) business totalling a cash transaction of E550 million Euros has been established.
The deal includes all of Cisco’s cable modem and set-top box businesses, and follows a similar move from Pace, who were recently been acquired by Arris.
This isn’t the first time Cisco has considered selling its set-top box division, originally purchased from Scientific-Atlanta, due to the rapidly changing market. In 2012 they were under pressure to keep up with technological advances and changes within the industry, and felt disenchanted with the market.
This strategic partnership between Technicolour and Cisco will see both companies develop and deliver the next-generation video and broadband technologies, alongside cooperations on Internet of Things (IOT) solutions and services.
The duo have also signed a long-tern patent cross-licensing agreement that covers specific intellectual property and patents from both companies. As part of the strategic move, Hilton Romanski, SVP and Chief Strategy Officer at Cisco, will join Technicolour’s Board of Directors.
“We know that video expertise is essential to the future of creating outstanding network and home infrastructure products and services,” Said Frederic Rose, CEO of Technicolor.
“Through this acquisition and strategic agreement, Technicolour can immediately bring its unrivalled experience and innovation in video creation, delivery, and display to more customers in more geographies, while strengthening our position as a technology leader.”
“This is the right time and we have the right company in Technicolour to drive the future of the CPE business to deliver what our customers and partners need, today and into the future. At Cisco, we are prioritizing our investments to deliver on our strategy of video in the cloud, and will partner with Technicolour to position the CPE business and employees for future success.” Said John Chambers, chairman and CEO of Cisco.
Expected to close at the end of 2015 or early 2016, the acquisition will result in Technicolour’s Connected Home segment reaching adjusted EBITDA in excess of 200 million euros by year-end 2016, and best-in-class profitability by 2017.
DTG Staff | 24.07.2015