In March, The Kudelski Group acquired Conax from Telenor Broadcast in a €164 million deal. André Kudelski, Chairman and CEO of The Kudelski Group and Morten Solbakken, CEO Conax, share their thoughts on what this means for both companies, their technologies and their customers.

Why did the Kudelski Group acquire Conax?

André Kudelski: Since 2011, one of our key priorities has been to further expand our footprint in emerging markets. In this context, the decision to acquire Conax was a logical one for the Group as Conax has focused on emerging markets and their solutions are suitable even for smaller to mid-size operators, which perfectly complements our existing product portfolio. With this acquisition, the Kudelski Group now has probably the best product portfolio in the industry to address both the needs of the new emerging market as well as the complex needs of advanced economies operators.

Morten Solbakken: It’s true, it really is a perfect fit. For more than 20 years, Conax has established a strong reputation by developing and delivering state-of-the-art, cost-effective and easy-to-deploy conditional access systems. We’ve been very successful in addressing both the needs of emerging market operators in addition to covering the specific needs of other operators for turnkey, easy-to-deploy solutions. I am looking forward to Conax playing an important role as part of the group by increasing the group’s overall market share, footprint and range of solutions, as well as enriching it with the expertise brought by our high quality staff.

What if any changes will take place at Conax as a result of the acquisition?

Kudelski: The Kudelski Group will continue to run Conax as a company within the Kudelski Group, with Morten Solbakken reporting to me. The two management teams will jointly define a strategy and a structure leading to a close alignment of the two organisations over the coming weeks, while keeping the best interest of our customers in mind.

Conax will continue to be run from Oslo by the existing management team. The Conax team runs a tight ship and is well serving their customers and delivering innovative new solutions to market. We will do everything we can to support the team in continuing to do so.

Solbakken: With regards to the rest of the Conax team, we are committed to deliver our product roadmaps, serve our existing customers and increase our customer base this year. We are continuously refining our organisation to enable execution of this plan. That being said, Conax is already a very efficient organization.

Are there any changes planned in Kudelski Group offices as part of the acquisition?

Kudelski: Again, we have no plans to change the current structure and organisation of the company, and that includes office locations. In the future, we will carefully examine any possibilities to create synergies on a case-by-case basis, but our primary goal remains to stay close to our highly valued customers to maintain optimal levels of customer service.

Will the Conax brand disappear?

Kudelski: No, the Conax brand will not disappear. We will be maintaining its corporate identity which is widely recognised and respected in the industry.

Will Conax continue to develop its existing products?

Solbakken: Conax’s security technology will continue to be actively developed in order to serve our existing customers as well as win new ones. Our technologies are complementary, and one will not replace the other. The whole premise of the acquisition was to add to NAGRA’s existing portfolio of CAS solutions. Together, we will actually have more to offer to our respective customers, and where there are product or partnership synergies with the NAGRA portfolio, we will look at what makes the most sense over the long-term to better serve our customers and maximize the success of the group.

We have an ambitious roadmap both for our highly efficient Contego backend, for our security clients and for our pre-integrated solutions. Of course, being part of the Kudelski Group opens a range of opportunities to strengthen the Conax roadmap further, enabling us to serve our customers with an even stronger products and solutions portfolio, and to get these to market quicker. We will actively pursue these opportunities. There are also opportunities the other way – Conax has products that NAGRA can take to their customers. Again, I see us fitting very well in the Kudelski Group. Kudelski also has other business areas, like Kudelski Security, which is totally complementary and highly interesting for our customers.

How will this affect the existing Conax partner network?

Solbakken: We launched our Conax Connect partner programme last year and will continue to team up with best of breed partners to create pre-integrated and tested solutions for various market segments. Through this initiative, we look forward to exploring the Kudelski product portfolio for opportunities to create additional attractive solutions to take to our customers across the globe.

In what ways are the two product portfolios complementary to one another?

Kudelski: Conax clients will have access to the non-CAS product portfolio of the Kudelski Group, like SmarDTV devices, and Kudelski Security services, as mentioned by Morten Solbakken, OpenTV middleware and, where required, the NAGRA MediaLive OTT service platform. This will give customers the possibility to acquire both individual products as well as end-to-end solutions from across the entire group, which will effectively reduce their overall cost of ownership, risk and time to market.

At the same time, Conax has some innovative new products like Conax OTT Access that may be of interest to some NAGRA customers. We are only just beginning to explore all the different ways to bring the best of both worlds to all our customers.

This is not the first example of consolidation in the CAS market. How do you see this trend going forward?

Kudelski: As the market matures and customer needs evolve, we have found increased demand for offering turnkey, pre-integrated solutions that include CAS, middleware, set-top boxes and multi-screen solutions and security services as well. We strongly believe that ultimately, the parties that are able to offer these solutions will be most successful, so that is why we have assembled a strong portfolio of world-class products. And because much of the growth in our industry is taking place in emerging markets, acquiring a champion in these markets like Conax increases the addressable market for our overall portfolio and contributes to our long-term success.

Categories: Articles, Business, CA/DRM, Content, M&A