Tandberg Television has signed a definitive agreement to acquire Californian IP delivery company SkyStream, and under the terms of the agreement, Tandberg will acquire privately-held SkyStream for a mix of cash and Tandberg shares.
The total consideration will be US$80M and the completion of the transaction is subject to a number of standard conditions. The transaction is expected to close in April.
SkyStream employs approximately 100 people across North America and in the UK, China and Korea. Founded in 1996, SkyStream has delivered seven years of sequential revenue growth and achieved profitability in Q4 2005. The company posted 2005 revenues of $30.7M, up 43% on 2004, and with a gross margin of 65%.
Through the acquisition Tandberg will expand its technology offering for IPTV and also for the cable, satellite DTH and on-demand markets with a complementary product set from SkyStream, which provides IP video solutions to over 300 customers worldwide.
“The sands are shifting in the digital media market and there is an inevitable level of industry consolidation taking place. In a marketplace with a number of acquisition opportunities to pursue, we chose to acquire SkyStream because of the company’s best-in-class technologies and its strong culture of building revenue and profitable growth,” said Eric Cooney, President and CEO of Tandberg.