Technicolor and Cisco Systems have signed an exclusive agreement, which will see Technicolor acquire Cisco’s customer premises equipment (CPE) business – also known as the connected devices division. Technicolor will pay €550 million in a cash and stock transaction. Approximately €413 million will be in cash and €137 million in newly-issued Technicolor shares.
By the end of 2016, the deal will boost the performance of Technicolor’s connected home segment to a gross profit of €200 million.
At the same time, the companies will begin a strategic partnership to develop and deliver next-generation video and broadband technologies. They will work together on Internet of Things solutions and services. Additionally, both companies have signed a long-term patent cross-licensing agreement, covering specific IP and patents.
Hilton Romanski, SVP and CSO of Cisco, will join Technicolor’s board of directors once the transaction has closed. This is expected to happen in Q4’15 or Q1’16.