Attempting to enhance its set-top and multiscreen device software development capabilities, SeaChange International has acquired set-top box (STB) and device developer and integrator DCC Labs.
DC 13 May 2016Part-owned by 7bulls.com, the Warsaw-based DCC Labs develops and optimises new and legacy digital TV services on STBs, mobile devices and smart TVs for systems integrators and TV operators and over-the-top (OTT) providers. It also delivers digital TV software stacks for services and optimises the entire vertical stack across all software layers.
In 2015, SeaChange engaged DCC Labs to support a major set-top development project for a large European cable operator, resulting in deployment of a user interface and an RDK 2.1-based home video gateway.
In the takeover deal, SeaChange has paid approximately $8 million in cash and stock. DCC Labs is expected to contribute an additional several million dollars of revenue annually to SeaChange who is in the middle of a corporate restructure as it attempts to stem a series of losses and return to profitability. The transaction is expected to be accretive in fiscal 2017, as well as provide an anticipated one-year payback through synergies and cost savings that SeaChange claims that it will begin to realise immediately. The transaction also includes a lock-up provision for the SeaChange stock that unwinds over a three-year period.
“Through our successful collaboration in the field, SeaChange determined that DCC Labs' experience and strengths are exceptionally well-aligned with our strategy to operate more efficiently and rapidly roll out high-value, front-end product innovations,” said recently appointed SeaChange CEO Ed Terino. “SeaChange is now better positioned to serve the global RDK licensee community, as well as fulfilling service providers' growing desire to focus on a select set of vendors to support their video infrastructure from the back-end all the way through to set-tops, mobile devices and the subscriber experience.”
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