Ericsson agrees to buy Envivio for US$125 million

Per Borgklint

Ericsson has agreed to buy software-based video encoding firm, Envivio, for roughly US$125 million in cash.

Ericsson said that the deal will strengthen its video compression standing and will extend its position in TV and media as a global end-to-end solution provider.

It will add Envivio’s cloud-centric and software-based video capabilities to its portfolio of media enrichment, processing, publishing, delivery, and TV platforms, which enable cross-device TV experiences.

Commenting on the deal, Per Borgklint, senior vice-president and head of business unit support solutions at Ericsson, said: “The combination will strengthen our encoding position with both custom silicon and pure software encoding, delivering performance and flexibility.”

“Our consumer research clearly shows that viewers are demanding TV on their terms on any device, and expecting experiences that continually evolve. We are committed to offering our customers a clear path towards fully agile cloud agnostic platforms that delight TV consumers.”

Envivio claims an installed base of more than 400 TV service provider and content owner customers, including Liberty Global, Sky and Time Warner Cable.

The San Francisco-based company has approximately 200 employees worldwide and generated revenues of USD 43 million during full-year 2014.

Ericsson will commence a cash tender offer to purchase all of Envivio’s outstanding shares. Envivio’s board has unanimously agreed to recommend that stockholders sell their shares in the tender offer.

The deal is expected to close in the fourth quarter, 2015, subject to customary closing conditions.