The Swedish giant Ericsson has been steadily shifting away from hardware and into software and services for many years now. They've done some of it via M&A, but generally not of the blockbuster variety. Today they did more of the same, announcing an agreement to acquire Envivio.
Ericsson will be paying $4.10 per share for the purchase, more than double where it was trading and adding up to a cash price of about $125M. The company had $9.5M in revenue in the three months ending on April 30, on which it lost three cents per share. That won't move the needle much for Ericsson's numbers of course, but it's more about the future than the present. The deal is expected to close during the fourth quarter.
Once complete, Envivio's IP video processing, delivery, and monetization solutions and the people who develop and maintain them will join Ericsson's TV and media division. Envivio is headquartered in San Francisco, but was founded by engineers from France Telecom and maintains a large R&D presence in France.
With Nokia buying Alcatel-Lucent and Ericsson buying Envivio, one wonders if Scandinavian interest in Franco-American vendor acquisitions is some sort of trend we ought to keep a further eye on.
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