9:00 AM -- Video encoding equipment vendor Optibase Ltd. (Nasdaq: OBAS) has had a very interesting start to 2007.

First, it spent $16 million on a 23 percent stake in Scopus Video Networks (Nasdaq: SCOP), another video systems vendor that also sells encoding, decoding, and video gateway technology. Optibase CEO Tom Wyler described that move as "an attractive investment opportunity." (See Optibase Buys Scopus Stake.)

Then just yesterday (Monday) it announced a new deployment in Eastern Europe, which is slowly becoming fertile ground for a number of IPTV system hopefuls. (See Optibase Wins in Latvia and Iskratel Partners for IPTV Package.)

And today, Optibase's stock leapt by $0.53, more than 13 percent, to $4.50 in pre-market trading after it announced better than expected fourth-quarter financials, a "healthy backlog," and encouraging signs from carriers.

Though it's a small company -- 2006 revenues of $18 million -- the Israeli vendor operates in a growing market that's rife with acquisition activity. A company to watch in the coming months, methinks. (See Arris Pounces on Tandberg TV, Moto Taps Tut for $39M, and Will Harmonic Keep Singing Solo?)

— Ray Le Maistre, International News Editor, Light Reading