Ericsson to acquire Technicolor's broadcast arm

As tipped in last week’s Broadcast, the Stockholm-based company is set to takeover Technicolor’s European playout operations in the UK, France and the Netherlands.

Ericsson has agreed to pay £15.9m (€19m) for the company’s Broadcast Services Division with a potential earn-out based on 2015 revenues of up to £7.5m (€9m).

Ericsson said the deal is in line with its strategy to broaden its capabilities in broadcasting. 

Executive vice president and head of the company’s business unit global services Magnus Mandersson said: “As the TV industry is undergoing fundamental changes with the transition to multi-platform, on-demand television, teaming up with a trusted partner enables broadcasters to meet the increasing commercial and technological complexity and competition in the TV market.

“We combine our service and technology leadership with strategic investments in playout operations, broadcast capability and competence.”

The deal, which is expected to complete mid-way through the year, will see 900 staff join Ericsson.

Technicolor chief executive Frederic Rose said: “This transaction is consistent with Technicolor’s strategy to focus on media monetisation solutions, new growth businesses, and strengthen its balance sheet.

“For Ericsson, managed services are a core business and after completion of this divesture, the broadcast services activity will benefit from the company’s know-how and global scale necessary to remain a key player in the worldwide broadcast industry”.

In the UK, Technicolor is reponsible for the playout of ITV’s suite of channels from its Chiswick Park base.