TANDBERG Television has announced that it has reached an agreement in principle to acquire the business of Atlanta-based N2 Broadband, a provider of scalable, open-platform solutions for on-demand entertainment. Under the terms of the agreement, TANDBERG Television intends to acquire privately-held N2 Broadband for a mix of cash and TANDBERG Television shares. The total consideration is expected to be in the range of $110M - $130M and completion of the transaction is subject to final negotiations, confirmatory due diligence and all customary legal and regulatory conditions. The two companies have put in place a $3M mutual break-up fee as part of the agreed terms of sale and the acquisition is expected to be completed in 1Q 2005, the first quarter of TANDBERG Television's fiscal year 2005.
"The acquisition of N2 Broadband will enable us to dramatically expand our North American market presence and augment our total solution offering to include the world's most advanced and open VOD software solution. Both of these factors are important cornerstones for our future success. In particular, the North American market represents the largest growth opportunity for TANDBERG Television's products and services over the next several years and N2 Broadband will immediately strengthen the route to market for our video compression systems into the US cable market," says Eric Cooney, President and CEO of TANDBERG Television. "Of equal importance over the long term is the expanding worldwide market for on-demand services such as VOD. Our pole position in European and Asian cable markets, as well as our global lead in the telco IPTV segment, provides an established route to market for N2 Broadband's industry-leading VOD software."
N2 Broadband's President and CEO, Reggie Bradford, will take up the role of President of TANDBERG Television Americas. The new combined North American concern will be headquartered in Atlanta, Georgia, with sales offices on both the East and West Coasts of the US and in Canada, with a total staff of 180 employees.
"This is a highly synergistic move that brings together complementary core technologies and market positions for the on-demand world. The combination of N2's VOD systems with TANDBERG Television's video compression solutions is a natural progression for both companies and will address the needs of the global digital entertainment market for open, scalable solutions. N2 Broadband's product lines will benefit tremendously from TANDBERG Television's leading position on the world stage and its strong sales momentum with global telco operators. I am also confident that our strong North American position will provide TANDBERG Television with a great platform for increased compression sales growth," says Reggie Bradford, President and CEO of N2 Broadband.
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