Electronics and digital technologies giant, Thomson, has signed an agreement with defense and aerospace technology company, Thales, to acquire the latter's Thales Broadcast & Multimedia (TBM) business unit, a supplier of digital TV technologies, including IPTV, VOD, mobile TV and digital terrestrial transmission (DTT) platforms. The deal will see Thales paying approximately €130 million in cash for TBM, based on a normalized level of working capital requirement and no net financial indebtedness: according to Thales, TBM's revenues for the year ended June 30th totaled €134.9 million and the unit was profitable. Thomson says that the acquisition will have a "neutral impact" on its core business earnings for the first year, and that it will be accretive after that.
The acquisition agreement is part of a strategic partnership agreement that calls for the companies to collaborate on developing video content management and distribution solutions for in-flight entertainment, security and defense applications, and that calls for Thales to divest itself of its digital TV business. Thomson says that its acquisition of that business will allow it to offer end-to-end products and services in the IPTV, mobile TV and DTT spaces, and that there are significant "synergies" between itself and TBM in terms of technologies, customers and operations, which will create "sizeable" cross-selling opportunities. The company says that the acquisition supports key elements of a corporate strategy that identifies electronic content distribution and the acceleration of the delivery of IP-based technologies as "key growth drivers."
Among other things, Thomson says, the acquisition will 1) allow it to provide a complete set of mobile TV solutions, from content creation to delivery, that use terrestrial TV technologies that are more suited for video than are wireless mobile infrastructures; and 2) put it "at the center" of the IPTV market, enabling it to offer everything from the software and distribution infrastructure that delivers live programming and VOD services to the set-top boxes through which consumers access that content. It also says that, because TBM enjoys significant market share in the terrestrial transmission systems space, the acquisition will allow it to address short-term opportunities occasioned by the switch-off of analog TV which is being planned in a number of countries, and which it says will boost demand for digital terrestrial transmission equipment.
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