Pace proposes 2Wire acquisition26 July 2010
Pace plans to widen its reach into the US telco market through the proposed acquisition of 2Wire for £308m. Pace intends to finance the acquisition from existing cash resources, together with new bank facilities (currently under negotiation).
In a statement, the Pace Board said it believed that the acquisition is a logical extension of its successful strategy and will enhance its established position in cable and satellite markets in the US with entry into the tier one telco market. At the same time, 2Wire’s software and gateway expertise will support Pace’s development of its home entertainment convergence strategy.
2Wire has established customer relationships in the tier one telco market, in particular with service providers in North America. AT&T, for instance, has been a customer of 2Wire for 10 years and 2Wire provides software and hardware solutions to enable AT&T’s U-verseSM suite of services that includes multiroom high definition TV, high-speed broadband and telephony. 2Wire is currently owned by a consortium including Alcatel-Lucent, AT&T, Telmex, and Oak Investment Partners.
Following the completion of the acquisition, Pace, already the number one global digital set-top box company, would also become the number one provider of telco residential gateway devices in the US and the number three globally.
Neil Gaydon (pictured), Chief Executive Officer of Pace, commented: “This acquisition will strengthen our Americas business, extending Pace’s US market coverage with entry into the tier one telco market. We have built a strong position in the US with cable and satellite operators and 2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of US operator requirements. 2Wire’s software and gateway expertise will further drive development of our home entertainment convergence strategy. The transaction introduces deep client relationships with important customers including AT&T and further develops our platform to deliver ongoing sustainable growth.”
Pasquale Romano, Chief Executive Officer of 2Wire, added: “Pace is an excellent strategic fit for the 2Wire business and will enable us to take our products and services to the next level of their development. The combined customer base, engineering capability and product breadth of Pace and 2Wire make this a compelling transaction for our customers, our employees and our end users globally.”