Technicolor to Acquire Cisco's STB business for €550m

Paris, France, July 23, 2015--Technicolor has entered into an exclusive agreement with Cisco to acquire its customer premises equipment (CPE) business for €550 million in a cash and stock transaction. The acquisition includes all of Cisco’s cable modem and set-top box businesses.

Cisco already considered a sale of the set-top box division it purchased from Scientific-Atlanta in 2012 as the company became disenchanted with the market which has changed dramatically since the US$ 7 billion purchase. In the same year, Technicolor CEO Frederic Rose also said that he was in talks with a number of companies to take a stake in its loss-making set-top box business.

Technicolor and Cisco will also enter into a strategic partnership that will allow both companies to develop and deliver next generation video and broadband technologies, with cooperation on Internet of Things (IoT) solutions and services.

Technicolor and Cisco also have signed a long-term patent cross-licensing agreement that covers specific intellectual property and patents from both companies. As part of the strategic agreement and after the transaction has closed, Hilton Romanski, SVP and Chief Strategy Officer of Cisco, will join Technicolor’s Board of Directors.

The €413 million cash portion of the consideration will be financed through cash-on-hand and fully-underwritten new debt with an anticipated limited impact on Technicolor’s leverage position. Reference Technicolor share price used for calculation of number of new shares issued will be the volume-weighted average price over a period of 7 days prior to announcement and 7 days post announcement. Newly issued shares to Cisco will be subject to an 18-month lock-up period on 5% of the corresponding ownership in Technicolor, with the remainder of the shares being subject to a 12-month lock-up period post-closing.

The transaction is expected to close by the end of the fourth quarter of 2015 or during the first quarter of 2016, subject to regulatory approvals and customary closing conditions