Arris Sets Sights on SeaChange
Arris Group Inc. (Nasdaq: ARRS) is in talks to buy video software and server supplier SeaChange International Inc. (Nasdaq: SEAC) for an as yet unknown price.
An industry source familiar with the situation confirmed to Light Reading Cable that discussions have been taking place for a few weeks. The Wall Street Journal broke the news of the talks Thursday.
The paper noted that TiVo Inc. (Nasdaq: TIVO) (a partner of SeaChange's) and NDS Ltd. had also considered buying SeaChange but have "lost interest now."
If Arris pulls off the deal, it would expand a video server and backoffice software portfolio obtained via its US$730 million acquisition of C-COR in 2007. (See Arris Deals for C-COR.)
Also of interest to Arris would be the set-top middleware and software SeaChange obtained via its purchase of Vividlogic. That product, Light Reading Cable has learned, is supplying the user interface that's powering Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s new Xcalibur convergence platform and new Spectrum HD-DVR being tested in Georgia. (See What's Inside Comcast's Parker Box? and SeaChange Snags VividLogic for $12M.)
SeaChange has been focusing less on hardware and more on its backoffice software, middleware and ad insertion products. That might be just fine by Arris, which recently launched its own next-generation server and has been distancing itself from a reseller deal with Verivue Inc. But SeaChange's advertising product might overlap Arris's products a little. (See SeaChange Softens Up, Cuts Staff and Cracks Form in Verivue/Arris Partnership.)
Arris, which counts Comcast as its largest customer, entered the set-top box market after buying Paul Allen's Digeo Inc. and has high hopes for a multimedia video gateway that's already been deployed by BendBroadband and Shaw Communications Inc. (See Shaw Deploys Arris Video Gateway and Arris Starts to Make Hay on Digeo Deal .)
The M&A rumor comes about eight months after one of SeaChange's big investors got upset that the company backed away from trying to sell its video hardware business. (See Shareholder Puts SeaChange's Feet to the Fire .)
Arris and SeaChange declined to comment.
— Jeff Baumgartner, Site Editor, Light Reading Cable