Pace to broaden converged TV proposition with Aurora acquisition
Editor | 23-10-2013
In a further part of its corporate rebound, pay-TV and broadband service provider Pace has entered into a conditional agreement to acquire Aurora Networks in a deal valued at $310 million.
Aurora is a developer and manufacturer of advanced, next-generation optical transport and access network solutions for broadband networks that support the convergence of video, data and voice applications and for year ended 31 March 2013 generated revenues of $217 million driving an EBITDA of $30 million.
Pace regards acquiring Aurora as offering the opportunity to further extend its strategy of broadening its reach from providing pay-TV set top boxes and other CPE and into more value added services that are required due to the evolving needs of customers. The deal will allow Pace to tap into a highly profitable and growing business serving over 200 customers in 50 countries, including all of the top 10 cable operators in the US.
The latter is a crucial element as North American sales have over the last year been the mainstay of Pace’s return to financial health following its near-corporate meltdown in 2011. Indeed Pace says that the deal would be “significantly accretive” to earnings in 2014 and accelerates it toward improved profitability target of 9% return on sales in 2015.
“Since the announcement of the Pace Strategic Plan on 17 November 2011, we have consistently delivered on it, achieving almost all of the milestones and targets laid out at that time and there remains significant opportunity for development of the core business, said Pace chairman Allan Leighton commenting on the deal.
“The acquisition of Aurora represents an important evolution in this process and enhances our strategy to grow a broader platform across Hardware, Software and Services. Acquiring Aurora will allow Pace to expand beyond our core business and build deeper and more embedded relationships with our customers, which the company believes will strengthen Pace’s position as a market leading solutions provider for the pay-TV and broadband industries.”
Following completion of the acquisition, Aurora will continue to be run by its existing senior management team and will operate as a Pace Strategic Business Unit retaining its brand.