Ericsson to Acquire Envivio for $125M in All-Cash Deal: IBC 2015
Ericsson will acquire Envivio, the company announced today at its IBC press event, for $125 million U.S. The all-cash deal puts a value of $4.10 per share on the publicly-traded Envivio.
"We bring the software vision for video compression and processing," said Envivio president and CEO Julien Signes, who was on-hand at the event. Ericsson is strong at hardware compression, he said, so the two company's strengths were complementary.
Envivio's delivery architecture will also be an asset to Ericsson, Signes said. "We're a virtualized software architecture that I think they can leverage nicely." Besides sharing many customers, the two hold the save view of the future of streaming television. "We share much of the same vision in terms of where the industry is going."
While Ericsson and Envivio have worked together often over the years, Signes said the deal came together quickly. Ericsson plans to close in Q4 of this year. Many details remain to be worked out, including Signes's role post-acquisition. "I'll probably be part of that," he noted with a smile. Envivio's biggest center is in Rennes, France, and Signes said that wouldn't change. Envivio has 184 customers. Tier one partners include AT&T, Comcast, Liberty Global, Sky, Telstra, and Time Warner Cable.
The other big announcement from the event was that AT&T has chosen Ericsson to help evolve its TV platform. The announcement lacked specifics—evolve into what?—but suggests that AT&T, which finally closed on DirecTV this summer—is looking to create new streaming offerings for consumers.
AT&T will combines its U-verse and DirecTV platforms with Ericsson's help, creating new entertainment offerings for both satellite and wireless customers. Once combined, Ericsson will help augment the offering with new functionalities, said Elisabetta Romano, Ericsson's new vice president and head of solution area TV and media.
Ericsson talked up the transitional period the TV industry is experiencing, and emphasized its value in content creation, content enrichment services (such as adding captions and sports graphics), and content publishing (for both linear and on-demand delivery). This morning, the company announced a multi-year broadcast services deal with the U.K.'s Channel 5.
"We would like to be the strategy partner for the TV industry in this transformation," said Thorsten Sauer, vice president and head of broadcast and media services for Ericsson. He emphasized that his company has the scale, expertise, and innovation necessary to guide its business partners.
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