Amino Splashes Out $73M for Entone

Deal Would Combine Set-Top Makers
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Signaling more vendor consolidation in the sluggish set-top box market, U.K.-based Amino Technologies has inked a deal to acquire Entone Inc. for $73 million ($65 million in cash).

Both suppliers make and sell IP-only and hybrid set-tops and gateways.

Cupertino, Calif.-based Entone, which also sells WiFi adapters and other types of accessories, has been particularly successful in the independent tier 2/3 service provider market using a platform that mixes traditional pay TV and over-the-top video, but has also secured footholds with majors.  Entone, which has also promoting an “legal” Aereo-alternative under which its FusionTV service combines over-the-air and over-the-top video services, has notched recent wins with Vodafone Netherlands, Three River Communications, mobile operator TIM Brasil, and Volia, a Ukrainian cable operator. In 2013, Entone and TiVo announced an agreement to jointly pursue IPTV deals that would also clear the way for Entone to combine TiVo with boxes with or without local DVR storage and focus on the delivery of cloud-based apps and services. 

Privately-held Entone, which has more than 150 customers globally, pulled in revenues of $43.4 million in the fiscal year ended June 30, 2014, and EBITDA of $3.9 million. In the 11 month period from May 31, 2015, Entone generated revenues of $46.7 million and EBITDA of $5.1 million. Entone had net cash of $12 million and net assets of $15.9 million as of May 31, 2015.

Amino said the deal will help it boost its global footprint and scale while also removing a direct competitor from the market. It expects financial synergies of about £1.0 million (US$1.5 billion) in the full year after the deal is closed. They expect to close the deal in the third quarter.

Scale is also a driving reason behind Arris’s proposed $2.1 billion acquisition of Pace Plc, the U.K.-based maker of set-tops, video software and broadband access gear.

"The proposed acquisition of Entone has the potential to transform our business and broaden our capabilities and market reach globally across IPTV, hybrid broadcast and a range of connected home solutions,” Amino CEO Donald McGarva said in a statement, claiming the deal also aligns with Amino’s recent buy of cloud-TV platform provider Booxmedia.

"Bringing together Amino and Entone would create a significant new presence in the pay-TV market with solutions and skillsets that are highly complementary,” added Entone CEO Steve McKay. “We share a very similar vision as to how our industry is changing and the kinds of solutions that are required to address both existing and new customers."

Canaccord Genuity has been appointed as financial adviser and joint bookrunner in connection with the acquisition.

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