Technicolor closes on Cisco connected devices
November 20, 2015
Technicolor has completed its $600 million cash and stock buy of Cisco Connected Devices; set-tops, cable modems, gateways and other CPE.
The deal is part of another round of consolidation in the set-top box market, and comes amid Arris’s pending merger with Pace Plc. Arris and Pace are currently the top two set-top makers based on market share. Once the recent M&A wave settles, Arris will top the market, followed by Technicolor.
As part of the deal, Technicolor and Cisco have also struck up a “strategic collaboration agreement” in which they will develop next-gen video and broadband technologies, with cooperation extended to their initiatives around the so-called Internet of Things. Cisco, which received $450 million in cash, also gets 21.4 million newly issued Technicolor shares that were worth $150 million when the deal was announced. As a result, Cisco holds 5.2 per cent of Technicolor’s capital share (16.7 million are subject to an 18-month “lock up,” and 4.6 million to a 12-month lock-up). Additionally, Hilton Romanski, Cisco’s chief strategy officer, has been appointed to Technicolor’s board.