Let the vendor consolidation continue.
Long-time set-top and video solutions company Entone Inc. announced yesterday that it has entered into an agreement to be acquired by Amino Technologies plc (London: AMO) out of Cambridge in the UK. The proposed deal is worth $73 million and is expected to close in the third quarter of this year.
While traditionally known for its IP set-tops, Entone has expanded in recent years to create hybrid TV solutions including its cloud-based FusionTV software platform. The company has more than 150 customers globally and reported revenues of $43.4 million at the end of fiscal year 2014. In the 11 months since that report, Entone has already brought in $46.7 million in revenues leading toward the end of fiscal year 2015.
One of Entone's major customer wins last year was Vodafone Netherlands , which selected Entone for the rollout of its new IPTV service to 5 million mobile customers. At the time, Entone CEO Steve McKay said: "What I believe is that there's a global trend for mobile operators to look to leverage the smartphone as the control center for the connected consumer." (See Vodafone Netherlands Rolls Out IPTV.)
Entone also made waves in 2013 by partnering with TiVo Inc. (Nasdaq: TIVO) to offer a new solution for IPTV operators, and with LG Electronics Inc. (London: LGLD; Korea: 6657.KS) to deliver a retail media player that had the potential to connect to a gateway device enabling a full slate of OTT video and premium television services. (See TiVo Teams With Entone for IPTV and Entone, LG Blend OTT With Live TV.)
Amino, which reported revenues of more than $56 million in 2014, acknowledged Entone's successes by calling its acquisition deal an opportunity to consolidate with a direct competitor. Amino also cited cost synergies and an increase in global footprint and scale as reasons for acquiring Entone.
"The proposed acquisition of Entone has the potential to transform our business and broaden our capabilities and market reach globally across IPTV, hybrid broadcast and a range of connected home solutions," said Amino CEO Donald McGarva. "It also aligns closely with our recent acquisition of cloud-TV platform provider Booxmedia, in enabling us to meet the evolving needs of customers across a range of markets as they transition to cloud-based IP-driven multiscreen entertainment delivery. We anticipate a number of synergies between the two companies and expect the proposed acquisition to be earnings enhancing in the first full year of combined operations."
Although the Entone deal is small compared to Arris Group Inc. (Nasdaq: ARRS)'s proposed acquisition of Pace plc , which is worth $2.1 billion, the transaction is still reflective of the importance of scale among set-top providers. Even as broadband and pay-TV companies are consolidating, so too is the vendor market feeling the urge to merge. (See Arris to Acquire Pace for $2.1B.)
— Mari Silbey, Senior Editor, Cable/Video, Light Reading