Ericsson announces agreement to acquire Envivio
Ericsson (NASDAQ:ERIC) announced on September 10, 2015, its agreement to acquire Envivio (NASDAQ:ENVI), by means of a tender offer for a price of USD 4.10 per share in cash, or approximately USD 125 million in the 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 every day.
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 USD 43 million during full year 2014 and is headquartered in San Francisco, CA. Envivio was founded in 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.
Per Borgklint, Senior Vice President and Head of Business Unit Support Solutions at Ericsson, says: “Our consumer research clearly shows that viewers are demanding TV on their terms on any device, and expecting experiences that continually evolve. We are committed to offering our customers a clear path towards fully agile cloud agnostic platforms that delight TV consumers. I look forward to welcoming the market leader in pure software-defined video encoding, processing, and packaging into Ericsson. The combination will strengthen our encoding position with both custom silicon and pure software encoding, delivering performance and flexibility.”
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.
Ericsson’s customers will uniquely benefit from a cutting-edge combination of market leading bespoke hardware and highly optimized pure software encoding that will deliver an accelerated route to next generation UHD/HD services and High-Efficiency Video Coding (HEVC) technology.
Envivio’s customers will be able to rely on the global stability and scale and the strong commitment of Ericsson in the TV and Media business with access to Ericsson’s full portfolio of products, solutions, and global services expertise.
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, 2015, subject to customary closing conditions.
The board of directors of Envivio has unanimously agreed to recommend that Envivio’s stockholders tender their shares to Ericsson in the tender offer.