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SeaChange Snags VividLogic for $12M

Jeff Baumgartner
1/7/2010
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SeaChange International Inc. (Nasdaq: SEAC) has concluded a $12 million deal to buy set-top and consumer electronics software firm VividLogic Inc.

The move will help SeaChange expand its software presence into advanced tru2way set-tops and a new breed of broadband-fed video gateways and media hubs.

VividLogic, a privately held company based in Fremont, Calif., has developed its own tru2way stack, placing it in competition with the likes of Osmosys SA (a subsidiary of set-top maker Advanced Digital Broadcast (ADB) ), Alticast Corp. , enableTV Inc. , and a tru2way "reference implementation" that's available directly from CableLabs . (See Can One Middleware Rule European Cable? )

Tru2way deployments are still in the early stages, but Funai Electric Co. Ltd. (OTC: FUAIY) has already announced its selection of VividLogic's stack for a coming line of tru2way set-tops. At least two other tru2way box makers have told Cable Digital News recently that VividLogic is on their short lists as they look to finalize that piece of the puzzle. One industry source confirmed that Pace Micro Technology is also using VividLogic's stack. (See Funai Makes Tru2way Play .)

VividLogic's portfolio also covers support for the Multimedia Home Platform (MHP), so its technology could also come into play as Cable Europe Labs looks to unify a fragmented digital video market with a pan-European middleware specification. (See CableLabs: 'Hundreds' Have Downloaded Tru2way Reference Stack.)

VividLogic, a 10-year-old company that pulled in revenues of about $7 million in 2009, also licenses IEEE 1394 "Firewire" software for set-tops, and has developed a software stack for wireless gateways that enables a central box to shuttle live and stored video to other TVs and set-tops on the home's high-speed wireless network.

The latter approach could prove popular in parts of Europe where MSOs are eager to deploy multi-room DVRs: Many of the homes they serve lack a significant number of coax outlets, ruling out technologies such as Multimedia over Coax Alliance (MoCA) .

Seeking an inside angle on next-gen boxes
SeaChange chief strategy officer Yvette Gordon-Kanouff believes the addition of VividLogic will enable SeaChange to expand its presence into more advanced boxes and complement the technology it's already providing to current generation set-tops.

"The two together provide us with a good migration path for operators as they launch these new technologies, [including] EBIF, tru2way, and home gateways," Gordon-Kanouff says.

On the middleware front, SeaChange already markets a TV Navigator system it acquired in 2005 via its $25.5 million purchase of the international assets of Liberate Technologies. Double C Technologies -- a joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cox Communications Inc. -- picked up Liberate's North American assets for $82 million, also in 2005. (See SeaChange Gets Softer and Cox Severs Ties to TVWorks.)

U.K. MSO Virgin Media Inc. (Nasdaq: VMED) is the marquee customer for SeaChange's TV Navigator product; Türk Telekomunikasyon A.S. also uses it. SeaChange's restriction on selling TV Navigator in North America lifts this year.

SeaChange didn't say how many copies of TV Navigator are currently deployed, but its entire portfolio of set-top software products, which include VoD clients and advanced advertising apps, are already in about 30 million devices.

Under terms of the deal, SeaChange will pay $12 million in cash upon closing, which is expected to occur within the next 30 days, according to a SeaChange official. SeaChange is also obligated to pay $1 million in cash to shareholders of VividLogic on each of the first three anniversary dates following the acquisition. All of VividLogic's 40 employees are expected to join SeaChange.

The deal marks SeaChange's second significant acquisition during the past three months. Last September, the company shored up its European presence by spending $36.5 million on Dutch video software company eventIS Group B.V. (See SeaChange Goes Dutch for VoD Smarts.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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