(Source: MARKETWIRE)
Cisco (NASDAQ: CSCO) today announced a definitive agreement to
acquire the set-top box business of DVN (Holdings) Limited (SEHK:
0500). Listed in Hong Kong with major operations in China, DVN is a
market and technology leader in digital cable solutions in China and
shares Cisco's vision of a high-performance, scalable and
services-rich cable interactive platform extending into every home.
Under the terms of the agreement, Cisco will pay up to $44.5 million
for the set-top box business of DVN. Of this amount, approximately
$17.5 million will be paid upfront, with an additional maximum amount
of $27 million to be paid over four years based on the achievement of
specific sales milestones. The acquisition is expected to close in
the first half of calendar year 2010 subject to standard closing
conditions, DVN shareholder approval and regulatory approvals.
In addition to the acquisition, Cisco has entered into a go-to-market
alliance with the remainder of the DVN organization -- which will
continue to be led by current DVN CEO Terry Lui -- in order to utilize
the company's middleware and advanced applications as well as
integration and support services. The alliance will provide joint
customers with unparalleled end-to-end capabilities through the
evolution from basic digital broadcast to advanced interactive
services.
"Cisco and DVN have similar cultures that emphasize video innovation
and a shared vision to enable multi-media connected homes across
China," said Ken Klaer, vice president and general manager,
International Cable Business Unit at Cisco. "With this acquisition,
we will offer customers the powerful combination of DVN's products
with the Cisco(R) IP Next-Generation Network (IP NGN) platform, and
Cisco will be well positioned to engage in the largest digital
transformation opportunity in the world today."
The Chinese cable market is currently the largest in the world with
160 million subscribers and is predicted to grow to as many as 200
million over the next three to five years. Currently, only about
one-third of the market has converted to digital cable. With the
Chinese government mandating full digitization by 2015, this
represents an important long-term opportunity for Cisco.
"Cisco's global technology leadership and breadth of services
combined with DVN's market-leading solutions and talented employee
base will ensure that Chinese consumers continue to receive superior
digital services today and are provided with world-class advanced
technologies moving forward," said DVN CEO Terry Lui.
