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Cable modem/CMTS

It's a Wrap

As expected, Pace Micro Technology on Monday sealed its deal to acquire the set-top and "connectivity solutions" unit of Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) . Shareholders approved the deal last week. (See Pace Rocks the Vote.)

Closure of the "reverse takeover," valued at $124.7 million and announced late last year, elevates Pace to the third-largest supplier of set-tops in the world, behind only Thomson S.A. (NYSE: TMS; Euronext Paris: 18453) and Motorola Inc. (NYSE: MOT). (See Pace Shoots for STB Stardom.)

The acquisition will expand Pace's piece of the global set-top pie and leapfrog it past Cisco Systems Inc. (Nasdaq: CSCO), but it won't provide Pace with much help in the U.S. beyond DirecTV Group Inc. (NYSE: DTV), which gets HD-DVR boxes from Pace and lower-end satellite TV receivers from the Philips division.

Philips flirted with the U.S. cable market early in the decade, selling both set-tops and Docsis cable modems. It eventually bugged out, despite securing a sizable deployment deal with Tele-Communications Inc., which is now part of Comcast Corp. (Nasdaq: CMCSA, CMCSK).

— Jeff Baumgartner, Site Editor, Cable Digital News

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