Pace plc may be well known for its work as a supplier of set top boxes in the UK and U.S.-based cable operators, but it believes it will have a chance to penetrate the U.S. tier 1 telco market by acquiring 2Wire for $475 million.
Although Pace has a strong foothold in the U.S. cable market, its presence in the traditional telco market is non-existent. By acquiring 2Wire, Pace instantly becomes the top supplier of residential devices in the U.S. with a tier 1 telco customer base that already includes the likes of AT&T (NYSE: T) and Bell Canada (NYSE: BCE).
2Wire CTO Jaime Fink, in an interview with FierceIPTV, said the acquisition gives his company "certainly a lot of space for us to grow given the kind of company Pace is."
"This acquisition will strengthen our Americas business, extending Pace's U.S. market coverage with entry into the tier 1 telco market," said Neil Gaydon, Chief Executive Officer of Pace plc in a release. "We have built a strong position in the US with cable and satellite operators and 2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of US operator requirements."
Of course, the deal will need shareholders from both Pace and 2Wire--which consists of a consortium that includes Alcatel-Lucent (NYSE: ALU), AT&T, Telmex (NYSE: TII), Oak Investment Partners, Meritech Capital Partners, and Technology Crossover Ventures--to sign off on the deal and necessary regulatory approvals. Following these approvals, Pace expects the deal to be completed in Q4 2010.
- see the release here
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