Tut Systems Inc. is acquiring Tektronix's telco video subsidiary, VideoTele.com for $7 million. The combined company will provide digital headend and digital video switching products for telco service providers. The merger is expected to be completed by the end of November.
Under the terms of the agreement, Tek will receive 19.9 percent of Tut Systems' common stock and a five-year note. For the fiscal year ending May 31, 2002 VideoTele.com had unaudited revenues of $24.7 million and had unaudited revenues of $4.9 million in its latest fiscal quarter ending Aug. 31, 2002. Tut provides technology for delivering digital media over existing copper wiring in neighborhood (NDUs) and mult-tenant unit properties (MTUs).
The soon-to-be merged VideoTele.com recently noted that 50 telephone companies now use its digital video headends to offer DTV to their customers over DSL and other broadband networks. The company claims 75 percent marketshare of the telco video market.
Tektronix is also selling its optical test portfolio to Digital Lightwave, a networks systems provider. The Optical Transmission Test product family sold for $10 million in cash and a transfer of the lease on its Mass.-based manufacturing facility.
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