Technicolor announced that it is selling its broadcast services business to Ericsson for €19m. The deal also includes a potential earn-out of up to €9 million based on 2015 revenues of the broadcast services business. The deal is scheduled to close in mid-2012.
Technicolor’s Broadcast Services activity has 900 employees in France, The UK and the Netherlands. It provides managed play-out services, live production support and media asset management services.
Technicolor says the transaction will contribute to its ongoing efforts to leverage its existing portfolio, optimize its investments allocation and free cash flow generation, and help reduce its debt level.
This is the latest of broadcast-related divestitures by Technicolor, and the first one for which it appears to have received any cash up front as part of the deal. The company’s previous divestitures which include the sale its Grass Valley head-end business, the sale of its transmission business to PARTER Capital Group, and the sale of its Grass Valley broadcast business to Francisco Partners, were all done for “nominal consideration”.
Technicolor CEO Frederic Rose said: “This transaction is consistent with Technicolor’s strategy to focus on media monetization solutions, new growth businesses, and strengthen its balance sheet. For Ericsson, managed services are a core business and after completion of this divesture, the Broadcast Services activity will benefit from the company’s know-how and global scale necessary to remain a key player in the worldwide Broadcast industry”.
“As the TV industry is undergoing fundamental changes with the transition to multi-platform, on-demand television, teaming up with a trusted partner enables broadcasters to meet the increasing commercial and technological complexity and competition in the TV market”, said Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services, Ericsson. “We combine our service and technology leadership with strategic investments in playout operations, broadcast capability and competence.”
Press Release: Technicolor to sell its Broadcast Services activity to Ericsson
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