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SeaChange International Announces Agreement to Acquire VividLogic,
Inc.
January 15, 2010
Source: Seachange International
SeaChange International announced that it
has entered into a binding agreement to acquire all of the
outstanding shares of VividLogic, Inc.
VividLogic is a privately-owned, California-based company
that provides software and services to cable television service
providers, set-top box manufacturers and consumer electronics
(CE) suppliers. Its software products include tru2way™,
Multimedia Home Platform (MHP) and Globally Executable MHP
(GEM)-based IPTV operability for set-top box and CE manufacturers,
and in-home content protection, as well as funded software
development for the creation of service provider-sponsored
home media gateways.
The combination of existing SeaChange in-home technologies
and the VividLogic platforms will enable SeaChange to capitalize
on the market shift towards IP-delivery into and within the
home.
Under the terms of the definitive agreement, SeaChange will
pay $12 million in cash upon the closing of the transaction,
of which $1.2 million will be deposited in escrow with respect
to specified indemnification matters.
In addition, VividLogic shareholders will be entitled to the
working capital on its balance sheet prior to closing, an
amount estimated to be $8.6 million. Of this $8.6 million
to be paid in cash, $3.9 million will be paid at closing,
$1.3 million will be paid on each of May 1, 2010 and August
1, 2010 respectively and $2 million will be paid on the one
year anniversary of the closing. VividLogic’s estimated
$8.6 million of working capital at the closing includes approximately
$5.9 million in cash.
In addition, SeaChange is obligated to pay $1 million in cash
to shareholders of VividLogic on each of the first three anniversary
dates following the acquisition. The purchase price will also
include earnout payments based on the operating performance
of VividLogic over the three year period ending January 31,
2013 with payment upon achievement of these metrics occurring
annually.
VividLogic revenues are estimated to be approximately $7.0
million for calendar 2009, and it is expected to generate
a small profit for the year.
Commenting on the acquisition, Bill Styslinger, SeaChange
Chairman and CEO noted, “VividLogic expands our software
product portfolio by providing wireless gateway, tru2way and
MHP capability to our in-home offerings. Tru2way and MHP are
especially important as both North American and European service
providers prepare their networks for customer interactive
applications.
SeaChange has made great progress with its software strategy.
Not only have we established ourselves as the leader in backoffice,
advertising and application software, additionally our various
in-home software products are deployed in approximately 30
million devices.”
“As the next generation of in-home devices including
wireless gateways and cable-ready televisions emerge, it is
important that we embrace these technologies to continue to
lead in the in-home software markets,” Styslinger continued.
“In 2010 our restriction to sell TV Navigator in North
America is lifted and, combined with our strong set-top software
presence, we plan to offer tru2way, MHP and wireless gateway
software that will enable our customers to share content and
offer next-generation applications. We are excited about the
market changes and the growth opportunities that lie ahead.
VividLogic’s leadership in key areas that complement
our own software offerings uniquely position us to lead in
the next generation of in-home infrastructure software, middleware
and application software.”
Blackstone Advisory Partners L.P. acted as the exclusive financial
advisor to SeaChange in this transaction.
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