Ericsson acquires Envivio for $125 mn, strengthens video capabilities

NEW DELHI: Telecom equipment major,  Ericssion has entered into an agreement to acquire Envivio for about $125 million in aggregate. The acquisition will strengthen Ericsson as a global innovator in enabling customers to deploy new technologies and agile video processing to innovate new services that engage TV consumers.

Under the terms of the definitive agreement, Ericsson will commence a cash tender offer to purchase all of Envivio's outstanding shares, with a merger following the completion of the tender offer which would result in all shares not tendered in the tender offer being converted into the right to receive $4.10 per share. Certain of Envivio's major stockholders, collectively owning approximately 34 percent of Envivio's outstanding common stock, have entered into a tender and support agreement with Ericsson committing to tender all of their Envivio shares in the tender offer and to vote in favor of the merger. The acquisition is expected to close in the fourth quarter of  2015, subject to customary closing conditions.

The board of directors at Envivio has unanimously agreed to recommend that Envivio's stockholders tender their shares to Ericsson in the tender offer.

Once acquired the business will be reported as part of Segment Support Solutions.

The acquisition will strengthen Ericsson's video compression position, combining its leading position in broadcast and contribution with Envivio's leadership in multiscreen cable and telecom. Envivio's cloud-centric and software-based video capabilities will be a key addition to Ericsson's extensive portfolio of media enrichment, processing, publishing, delivery, and TV platforms, enabling TV experiences on any device.

Envivio is a global leader in software-based video encoding with an installed base of over 400 TV service provider and content owner customers in all markets, globally. Envivio generated revenues of $43 million during full year 2014 and is headquartered in San Francisco, CA.  Envivio was founded in year 2000 and has a staff of approximately 200 employees worldwide.

Tier one Envivio customers include Comcast, Cox Communications, Liberty Global, Sky, Telstra and Time Warner Cable. Envivio's advanced software solutions for pay TV and TV Anywhere applications perform software-based video encoding/transcoding, processing, packaging and ad insertion. Envivio's cloud-centric pure software video processing is available on Intel-based appliances or IT blade servers.

The acquisition will greatly enhance Ericsson's software video encoding capabilities and its virtualized encoding concept, which enables abstraction of video processing functions from architectural and functional boundaries, enabling the flexibility to use both hardware and software based video compression, as well as any deployment architecture.