Ericsson swoops for Technicolor broadcast services division

In a clear attempt to establish its credentials as a leader in broadcast-managed services, Ericsson has acquired Technicolor’s Broadcast Services division.

The deal is for USD 25 million with a potential earn-out based on 2015 revenues related to broadcast services activity of up to USD 12 million. After this acquisition is closed, likely some time in mid 2012, Ericsson says it will be the leading independent play-out service provider in Europe. Ericsson will take on 900 professionals and gain new play-out operations in France, the UK and the Netherlands.

The telecoms giant describes its move as part of its managed services strategy to broaden its capabilities in the broadcasting area and applying the managed services business model established in telecom operations, to improve efficiency, introduce innovation and increase revenues for the broadcasters.

The Executive Vice President and Head of Business Unit Global Services Magnus Mandersson explained: “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… We combine our service and technology leadership with strategic investments in play-out operations, broadcast capability and competence.”

The Technicolor CEO Frederic Rose added: “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”.

Ericsson is the leading provider of managed services for telecom operators and  has invested in processes and tools in this segment. With this acquisition Ericsson broadens its managed services for media broadcasters offering and confirms the company’s long term ambition and commitment to the area.