Motorola Seals Up Terayon
Terayon has become a wholly owned subsidiary of Motorola and will be integrated into the company's newly created Home & Network Mobility business, which fuses together what was Motorola's Connected Home Solutions and Cellular Wireless Networks businesses. Dan Moloney, the head of Connected Home, is helming the newly combined entity.
Motorola said it will maintain Terayon's operations in Santa Clara, Calif. The deal is expected to have a neutral effect on Motorola earnings per share in 2007.
Following a bidding war that reportedly included Cisco Systems Inc. (Nasdaq: CSCO) and Harmonic Inc. (Nasdaq: HLIT) as other possible suitors, Motorola officially announced its intention to purchase Terayon on April 23, 2007. Terayon stockholders approved the deal on June 28. (See Motorola, Cisco Bidding for Terayon and Motorola to Buy Terayon for $140M.)
Motorola plans to use Terayon's products and expertise to shore up its digital video strategy. Of recent note, Terayon expanded its flagship CherryPicker Application Platform (CAP) with the release of the CAP-1000. Terayon claimed it to be the first video processing application platform to rate-shape "broadcast quality" MPEG-4 AVC-based standard- and high-definition video streams. (See Terayon Expands CherryPicker Lineup.)
Motorola, which just reported some disappointing second-quarter earnings due to flagging handset sales, is also trying to bolster its video and fixed mobile convergence strategy with acquisitions of Leapstone Systems Inc. and Modulus Video Inc. On Thursday, Motorola chairman and CEO Ed Zander said the company might pursue other "small acquisitions" in the IP and technology market, but didn't elaborate.
The closing ends the run of what was once among the most colorful and controversial vendors in the cable industry.
Terayon, once a supplier of Docsis cable modems and cable modem termination systems and a champion of the upstream-enhancing Docsis 2.0 platform, bugged out of that business for good in early 2005. Instead, the company trained its focus on digital video, spurred by Terayon's $100 million acquisition of Imedia Corp., the original maker of the CherryPicker, in July 1999.
Terayon was sued several years ago when CableLabs told the company to cease and desist claims that the vendor's S-CDMA technology would be part of an erroneous spec called Docsis 1.2.
S-CDMA, along with A-TDMA, eventually became part of Docsis 2.0.
— Jeff Baumgartner, Site Editor, Cable Digital News