www.pace.co.uk
Pace to buy US broadband equipment maker 2Wire for £308m
Set-top box manufacturer Pace (LON:PIC) is tapping into the internet TV market and broadening its customer base in the US after agreeing to acquire broadband equipment maker 2Wire for £308 million.
Pace called 2Wire “the number one supplier into the fast growing US telco residential gateway market,” noting that it was profitable and cash generative and has established customer relationships in the tier one telco market with North American service providers such as AT&T (NYSE:ATT). The company stated that it would become the number one provider of telco residential gateway devices in the US and the number three globally.
“This acquisition will strengthen our Americas business, extending Pace's US market coverage with entry into the tier one telco market...2Wire's software and gateway expertise will further drive development of our home entertainment convergence strategy. The transaction introduces deep client relationships with important customers including AT&T and further develops our platform to deliver ongoing sustainable growth,” said chief executive of Pace Neil Gaydon.
2Wire is currently owned by a consortium including Alcatel-Lucent, AT&T, Telmex, and Oak Investment Partners.
The acquisition consideration, which will be covered by existing cash resources and bank facilities, is inclusive of 2Wire’s balance sheet cash at closing, which is expected to be at US$55 million.
Pace simultaneously reported its interim results, which included a 21% jump in revenues to £635.2 million and a 46% hike in pre-tax profits to £45.4 million. The balance sheet stood at £94.1 million.
Shares in Pace rose 7% on the news.
