More Broadcast Vendor M&A: Technicolor Receives Binding Offer for Video Head-End Business, Says Asset Disposal Program is Now Complete

Posted by Joe Zaller
Mar 03 2011


Technicolor continues to divest non-core broadcast video assets. The company has already sold Grass Valley to Francisco Partners, and it has received an offer for its transmission business from Pater Capital, a German private equity firm.

The remaining piece of Technicolor’s foray into broadcast technology is the company’s video head-end business, currently operated under the Thomson Video Networks brand. Now it looks like this business will also be sold soon.

Technicolor says it has received a fully documented binding offer for the head-end business from the FCDE, an investment fund financed by the FSI (Fonds Stratégique d’Investissement) and major banks and insurance companies operating in France.

Similar to the previous Grass Valley disposals, Technicolor says “the offer values the Head-end business for a non-material amount.”

Technicolor’s head-end business offers a variety of video compression and content processing solutions. It has 525 employees and operates in 15 countries. In 2009 the head-end business recorded revenues of €61m, which Technicolor says was 16% of the total Grass Valley perimeter revenues and 20% of its operating loss.

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Key Elements of the Offer

 §  The scope of the offer includes all assets and employees of the Head-end business. This comprises the entire product portfolio, including video encoders/decoders, MPEG processors, video servers, datacasters, network management, monitoring and switching product lines. The offer also comprises sales and customer services functions as well as the management and support functions.

§  The FCDE will also enter a trademark agreement with Technicolor for the use of the Thomson trademark.

§  The offer values the Head-end business for a non-material amount.

§  Based on the book value of the assets, the Group expects to register a non-cash loss for this disposal in its 2010 financial statements.

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The transaction is expected to close in H1 2011, subject to the relevant customary regulatory administrative approvals and consultations. 

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